Monday, November 14, 2016

India's great bank note switch appears to be working...

(...)

As I’ve mentioned before I regard this all as having been rather well done. Yes, obviously, there are long lines and no little disruption. Yet small amounts of cash, the sort that might be lying around in a wallet or as an emergency stock, can be changed at the banks into still useful notes. It’s going to be a little more time before the ATM machines are all altered to be able to deal with the new denominations but not that long in a country so large. And larger sums can still be deposited into bank accounts. This isn’t just the straight confiscation of the value represented by those cash bills. Rather, it’s an insistence that the cash must enter the banking, and thus the tax, system. Cash that can be shown to have been legitimately earned and taxed enters the bank system at no further cost in penalty or tax. Cash that has been untaxed must enter said banking system or become worthless–and once recorded in the system the mills of justice will be able to grind slow and small to ensure that it is taxed.

As I mentioned yesterday this all seems to be rather well done, a clever plan. Even if the allegations by Kejriwal were true (which I don’t think they are) that the news was selectively leaked it would still work. Because the way to get around the bank note switch is to deposit into the banks–which is what is the desired result anyway. Got to grant credit to a plan that still works even if it leaks. Full story...

Related posts:
  1. India's audacious plan to bring digital banking to 1.2 billion people...
  2. Making child's play out of banking in India...
  3. India in uproar over rupee's fall...
  4. Indian guru blames rupee symbol for currency woes...

No comments:

Post a Comment