Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Wednesday, 21 December 2016

People with Inside Info ?

Having never met Shri Narendra Modiji , I do not have the advantage of knowing his thinking on the issue of eliminating BLACK MONEY , - an advantage that Shri Gurumurthy and Shri Anil Bokil seem to enjoy, going by the following news reports :


Source : Times of India ( 12 Dec  2016 )

" Introducing Rs 2000 notes is a stop-gap arrangement for the immediate post-demonetisation scenario, RSS ideologue S Gurumurthy said today in New Delhi.

Asked why the Rs 2,000 note was brought in and that it could encourage black money, Gurumurthy said, "In the short time of two months you do not have time to print Rs 500 and Rs 1000 notes. 

This 2000 rupee note must be phased out ... Demonetisation is not a one-stop solution for black money. This requires a very major agenda... The nation is rebooting."


Source : Hindustan Times ( 22  Dec  2016  )

" Anil Bokil, the man who gave the idea of demonetisation to Prime Minister Narendra Modi, on Wednesday said the Rs 2,000 note was only a stopgap arrangement and it would be withdrawn once availability of cash normalises in banks.

 Bokil, said the Rs 2,000 notes were only serving as a ‘diversion’ to allow the government to build an ‘overbridge’ in place of the ‘road damaged by black money’. “It will be closed once the overbridge is complete,” he added.

The social activist from Aurangabad in Maharashtra, however, warned that the government’s bid to encourage cashless economy would yield positive results only if the tax system is revamped, offering huge incentives to the people.

To best of my knowledge, proposal that Shri Bokil presented to Shri Modi in 2013 ( when he was CM - Gujarat ) mainly comprised of :

( A )  Total abolition of Personal Income Tax and introduction of 2% BTT ( Bank Transaction
        Tax ) on all " payment transactions " through bank ( not on withdrawals )

( B )  Abolition of all other Indirect Taxes

( C )  Highest denomination currency note to be of Rs 50

I totally support ( A ) , and unable to comment on ( B )

But I believe ( C ) is totally impractical

I agree that the black money holders would find it impossible to hoard Rs 1 crore at home ( or in bank lockers ) , consisting of Rs 50 note, or carry in a brief case, weighing 200 kg !

But , if people could manage their daily purchases with a Rs 50 note , millions would not be queuing up before the bank counters and ATMs, for past 42 days !

Even a housewife, out for shopping, needs to carry in her purse, notes of Rs 500 , when
even vegetable prices hover around Rs 150 per kg !

Reason why countries such as USA / UK etc , manage with their highest denomination notes at 100 times the face value of their smallest denomination notes is that, in their economies, some 90 % of the payment transactions are " Non Cash "

It would be many years before we could reach that stage

So, the government must have thought :
" For now, we do need higher denomination notes "

But the BLACK MONEY holder / generator thought :
" Oh, what a god-sent opportunity to carry Rs 10 lakh worth of Rs 2000 notes in my pocket , weighing only 500 grams instead of 1 kg weight of Rs 1000 notes ! "

Events of past few weeks have only re-confirmed my belief that the only way to keep the higher denomination notes into circulation for day-to-day usage of common men but, at the same time thwart the re-generation of a vibrant BLACK ECONOMY , is to :

{  http://myblogepage.blogspot.in/2016/11/embrace-inevitable.html  }

And , this much I say , without being privy to any inside information !

To the NDA ministers , I would say :

There is no loss of face in admitting that just replacing OLD notes with NEW notes , has turned out to be a case of replacing OLD black money economy with a NEW black money economy ( leaving aside reported demands for bribes in the form of Gold / Diamonds ! )

Let us not lose this battle ,

{  http://myblogepage.blogspot.in/2016/12/for-want-of-nail.html  }

22  Nov  2016
www.hemenparekh.in / blogs