For over a year , I have been strongly advocating
embedding Rs 500 / 1000 new ( plastic ) currency notes with RFID sensors , to
track large accumulations of these high denomination currency notes ( Rs 1 cr
worth in 1 Sq Meter area ) , in order to bring an end to BLACK MONEY - and
CORRUPTION
Following are comments / views of two experts in
respect of my suggestion
# Sanjay
Sarma , sent following email :
Dear Mr.
Parekh,
Yes, placing
tags on money has certainly been considered in the past. I think it is a
matter of time before it happens. I do
agree with your idea.
Having said
that, as more and more transactions become digital (credit cards, bitcoin,
Adhaar card, etc.) the need for tracking cash goes down — ironically as our
ability to track it increases.
-Sanjay
Sanjay Sarma , 35-206 MIT. 617 253 1925 (T). 617 253
7549 (F).
Email : 'SESARMA@MIT.EDU'
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# Guillaume Lepecq sent following views :
Dear
Hemen,
Thank
you do for your kind e-mail. I am delighted you enjoyed the article.
If
I understand correctly you are suggesting to incorporate RFID into
high-denomination banknotes in order to avoid tax evasion.
This
idea is not new; let me point out why I personally believe it would not work.
- There is a need for an anonymous payment instrument
In
a democracy, it is perfectly legitimate to have the freedom to make a
transaction, or to store money without the monitoring of the State. And
this anonymity is not synonymous with tax evasion.
One
may wish to buy a present for his wife, without her seeing the transaction on a
bank receipt. People who are ill have the right to purchase medicine in a
confidential way.
I
recently spoke to a pharmacist in France, who mentioned that many young people
purchase contraceptives in cash.
- Cash is anonymous but the anonymity is limited.
The
anonymity of cash is limited by regulation, technology and bulk. Regulations
include for instance imposing a cap for cash transactions; many countries in
Europe have implemented this.
Internationally,
the transportation of cash across borders is limited to $ 10,000. Technology,
includes for instance inks used in banknotes which can be detected by sniffer
dogs.
Also,
forensic taggants are used in some countries and are sprayed on a banknote in
the case of a robbery; when the taggant is detected, the banknote can be traced
back to the robbery. Lastly, cash is heavy and bulky to store and transport.
- Other anonymous payment instruments pose a far bigger
threat
During
the recent terrorist attacks in Europe, it has appeared that the terrorists
have used anonymous pre-paid cards to fund the activities. Virtual currencies
also offer a cheap alternative to make perfectly anonymous transactions with a
simple click.
- Using electronic tags in banknotes poses operational
challenges
Firstly,
it would increase significantly the cost of the banknote. But what happens if
the tag is deactivated? There are stories where consumers have deactivated
chips in ID documents by ‘frying’ them in a micro-wave.
Would
deactivated banknotes still be legal tender? Also, a real fraudster would
simply shift to another payment method and in the example you present, he would
use lower denominations that do not carry electronic tags.
I
hope this helps.
I
invite you to visit www.cashesentials.com.
The full report which was mentioned in the Business Line article will be
available as of April 12.
With
kind regards,
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# My
Take
:
As onetime CEO of Sun Microsystems , Scott McNealy
pointed out , way back in 1999 ,
" Privacy
is dead , so get over it ! "
Of course , a little bolder - and universally welcome
alternative would be :
" Abolish
Personal Income Tax , thereby totally eliminating all incentive to generate Black
Money through tax evasion .
All payments will get made through official
channels .
Within 6 months , all Black Money will become WHITE and flow into the productive mainstream of the
economy
Revenue loss of Rs 2.5 lakh*crore but GDP will go up to
10 % !
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hemenparekh.in / blogs
26 March 2016