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

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Sunday, 8 January 2017

Taking Stock



As two months get over since announcement of demonetization , it is time to take stock of the situation


Here is a brief list of OBJECTIVES ( some stated at the outset and a few invented as time passed ) , and actual ACHIEVEMENTS :


SHORT TERM OBJECTIVE :

To unearth all BLACK MONEY and suck it into the Banking System ( viz: Rs 500 / 1000 notes )


Achievement  :

Although there is no finality as to the VALUE of old notes that have returned , it does appear that , by and large , this OLD STOCK of " Black Money in CASH " , has been extinguished ( or got cleverly converted into WHITE , if your friendly bankers obliged you for just 30 % ! )


I wonder what Shri Arun Jaitleyji meant by saying yesterday :

" Black Money did not change its color merely by getting deposited in bank "



He has very little supporting evidence to prove in a court that Rs 4 lakh*crore, deposited by individuals, in 60 lakh bank accounts each , was indeed  BLACK  before getting deposited !


Through 1138 searches and issue of 5184 notices , what has the government " achieved " in past 2 months ?

Seizure of Rs 200 crore worth of NEW notes and jewellery ! And referring 526 cases to CBI / ED !


Even as people have forgotten 5 / 15 years old, ongoing court cases , involving corruption  of thousands of crores of rupees , in case of A Raja / Kanimozi / Dayanidhi Maran / Subroto Sahara / Suresh Kalmadi / Lalu Yadav / Coal Scam / Telgi Scam / Bofors Scam etc  !


Going by this history , how many " decades " will CBI / ED take to file 526 FIRs ?

Then there is, a somewhat belated realization that much of the OLD STOCK was in the form of Gold / Jewellery / Land / Benami Property etc , which , just cannot be " demonetized " in short term . 



MEDIUM TERM OBJECTIVE :

To permanently STOP future generation of BLACK MONEY

  
Achievement :

Total failure !

If anything , with introduction of Rs 2000 note , this has been made twice as easy !

There is only ONE WAY . Implement,


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



LONG TERM OBJECTIVE :

To move India to a LESS CASH economy , through an aggressively marketed system of DIGITAL PAYMENTS ( Cards / ATM / Wallets / Electronic Clearances / UPI etc )


Achievement :

This objective is ON TRACK , and likely to take us to 50 % Non-Cash transaction Economy , by 2020


This has come about due to :

*  MSME / Ordinary consumers had NO OTHER ALTERNATIVE ( but go digital ) , in order to
   survive ! ( much like a child learning to swim by thrashing hands / legs , when thrown
   into water , or risk drowning ! )

  
Mobile Wallet companies / Banks / FinTech Companies / E Commerce firms , saw a huge
   opportunity for making tons of money by aggressively marketing their digital products !
   Of course , with plenty of help from the Government , offering pittance of " discounts "
   and sundry " prizes " !


  Notwithstanding all of this push to GO DIGITAL , our day-to-day payments will slide back
  to CASH, as soon as there is plenty of supply of Rs 500 notes( no getting away from that )



UNSTATED OBJECTIVES :


Interest Rates will come down

    Sure , with a huge influx of funds , most banks have cut their interest rates by 60-80 basis points for lending of loans but so far , there are few takers !
And banks will reduce the interest payable on Savings Accounts , if not already done


Direct tax collection will go up

   It is hoped that 6 million Black Money holders who have deposited Rs 7 lakh*crores  into their bank accounts , will come forward to declare their ( so far ) hidden incomes under PMGKY and pay up 50 % tax .

If last Undisclosed Assets Declaration Scheme is any indication, do not expect more than Rs 40,000 crores to get declared , yielding Rs 20,000 cr by way of taxes


Billions  of  Rupees will get invested in Infrastructure Projects

   Sure , most of those Rs 7 lakh*cr deposited in banks could get invested in Infra SPVs, if :

   *  No questions are asked as to the source of those deposits ( SPV specific Amnesty
      Scheme )

   *  SPVs cannot declare dividends for 10 years

   *  Investments can be withdrawn after 10 years ( along with accrued dividends ) by
      paying prevailing tax rates


      In fact , such an announcement can bring in a further Rs 70 lakh*crores of fresh
      deposits into banks by Black Money holders liquidating their Gold / Jewellery / Land etc


Dear Shri Jaitleyji :


It is still not too late to ,



(http://myblogepage.blogspot.com/2016/11/embrace-inevitable.html }


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09  Jan  2017


www.hemenparekh.in / blogs



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