For Want of a Nail

We have all heard the story of a king who lost a battle for want of a nail - the nail that came off the horse-shoe and stranded the king , in the middle of the battle

That entire saying goes like this :

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For want of a nail the shoe was lost.

For want of a shoe the horse was lost.

For want of a horse the rider was lost.

For want of a rider the message was lost.

For want of a message the battle was lost.

For want of a battle the kingdom was lost.

And all for the want of a horseshoe nail.

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Let me reconstruct this in the current context :

#  The Kingdom :     Indian Economy

#  The Battle     :     Black Money

#  The Enemy    :    Tax Evader

#  The  Horse    :     Demonetization

#  The Rider      :     NDA Government

#  The Message :     Return OLD notes 

  

#  Horse Shoe   :     Rs 2000 Currency Note

#  The Nail        :     RFID micro-chip ( one fiftieth thinner than hair ) , costing

                              30 paise

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HOW  IS  THIS  BATTLE  SHAPING  UP  SO  FAR  ?

Just open your morning news paper or your favorite TV Channel , to listen to the tales of sufferings of poor people - and forecasts of a dark Economy , in respect of :

Perishable articles rotting / Aggregate Consumer Demand getting depressed / CPI - Inflation reducing /  Money Supply shrinking / Transport coming to a Standstill / Real Estate prices dropping / Commodity prices deflating / Interest Rates likely to be lowered by 25 bps / Bulk Deposit rates being reduced / Huge liquidity in Banks becoming a burden /  CRR and MSS to help out with excess liquidity in banks / GDP growth to come down for next two quarters / GDP growth to drop by 2 percentage point , next year / Note printing rates too low / It will take 12 months to replenish the Rs 500 / 1000 notes / Mfg PMI tanking / ATM re-calibration just too slow / Withdrawal limits are draconian / Farmers are committing suicides / Mobile Wallets are ushering a CASH LESS economy / Credit - Debit cards being used by poor / UPI is the only long term salvation / Black Money will flow to Gold and property / Marriages getting postponed / Patients suffering after denial of emergency aid / Healthcare in shambles / Auto-Tractor - Car sales down / Retail sales down by 50 % / Jobs getting lost....etc

Surprisingly , in all of these sufferings , only a few people are saying :

" Earlier , it was difficult to carry Rs 10 lakh in your shirt pocket because it took 1,000 notes ( of Rs 1000 each ) , weighing a total of 1000 grams ( 1 kg )

Now you need to carry only 500 grams ( of Rs 2,000 notes ) !

In less than a year , Tax Evaders will start " Corrupting " the economy with Rs 2000 notes and we will be back to square one of a new parallel economy - credit cards / debit cards / mobile wallets / PoS - Card Readers , notwithstanding ! "

EVEN AT THIS STAGE , CAN ANYTHING BE DONE TO WIN THE BATTLE  ?

Most certainly !  By putting the NAIL in the HORSE SHOE !

By " Embracing The Inevitable "

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

Dear Shri Narendrabhai :

It is NOT too late !

with regards,

hemendra parekh

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06  Dec  2016

www.hemenparekh.in / blogs

Message from Moradabad ?

NDTV.com ( 03 Dec 2016 ) , carries news report titled :

" Your Phone Is Your Wallet, Says PM Narendra Modi In Moradabad "

The report quotes Shri Modiji to have said at a rally :

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" If we can give power to the poor, poverty can end tomorrow. This is my country's strength, the poor don't beg, they give.

The rich are now pleading the poor. They say, the kids are grown up now. You have been so nice to us. Why don't you deposit my 2-3 lakhs in your Jan Dhan account.

The powerful, the honest are queuing outside banks. The rich are secretly queuing up outside the houses of poor, requesting them to deposit their money in their Jan Dhan accounts.

Whoever's money you have put in your accounts, don't withdraw a penny. See how they will make rounds of your houses. Plead you. Fall at your feet.

If someone threatens you, say do not, or else I would write a letter to Modi.

Promise me that you will not withdraw and give that money. If you don't, I promise I will find a way. A way to send these people to prisons and the money to your houses. "

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I have no doubt that those listening to Shri Modi , got the message , loud and clear !

Those listeners are unlikely to be waiting for Shri Modi till he " finds a way " to send money to their houses, not knowing how long that might take !

Those Jan Dhan account holders ( out of a total of 25.78 crore , including those 4 lakh NEW accounts that got opened in past 27 days ) , who deposited the Black Money of those " rich " into their Jan Dhan accounts , have started asking of themselves :

"  If and when , RBI allows me to withdraw the entire deposit , that " rich " man will give me only 25 %  as my commission , even as I run the risk of being put behind the bars for 7 years , under the new BENAMI Act

On the other hand , Shri Modiji is clearly " hinting " that I should declare this deposit as MY OWN  UNDISCLOSED  INCOME , pay 50 % tax , keep 25 % for immediate personal use and get another 25 % after for 4 years , locked up in Gareeb Kalyan Yojana

In long term, Shri Modiji is giving me 50 % against rich man's 25 % !

And 25 % of the deposit becomes MINE , right now , officially , legally and without going to jail  !

And  that " rich " guy dare not threaten me , because if he does , I can report him to the IT dept / Enforcement Directorate "

Dear Shri Narendrabhai :

Please , ensure that the IT / ED too , interpret your " Message " as you have intended !

If they do , there is a good chance that , out of those Rs 28,685 cr deposited in Jan Dhan accounts since 09 Nov , Govt will get

#   Rs 14,000 cr by way of taxes , right away

#   Rs  7,000 cr in Gareeb Kalyan Yojana bonds

and , you will be " sending to the houses of those poor " , Rs 7,000 crores !

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06  Dec  2016

www.hemenparekh.in / blogs

  

Prime Minister Who Listens

Some may call him " inscrutable "

Till 2 days back , Shri Modiji was warning poor Jan Dhan account holders not to allow Black Money holders to use their accounts as some kind of a " Magic Hat " , where you put in OLD notes and , after a few weeks , pull out brand NEW notes !

He was warning Jan Dhan account holders with dire consequences ( 7 year prison ) , if they turned themselves into BENAMI account holders for Black Money owners

Following figures ( Nov 09 - Nov 30 ) , were enough evidence to suspect that this had happened :

*  ZERO balance Accounts went down by............... 4  lakh

*  Total No of accounts went up by...................... 27  lakh ( to reach 25.78 crore )

*  Total Deposits went up by......................Rs 28,685  Crore ( to reach Rs 74,322 cr )

He repeatedly said : IT / ED will keep a sharp eye on those account holders who withdraw their entire deposit within 3 / 4 weeks ( ostensibly , to return the WHITE cash to the original Black Money owners , after deducting their 30 % " commission " )

Such sudden / total withdrawals would enable IT / ED to track down those original Black Money owners and raid them ( of course , poor Jan Dhan account holders would cooperate and reveal such information , when promised " pardon " ! )

Given this simple-sounding logic, it came as a surprise to all that RBI imposed restrictions on withdrawals from these accounts at Rs 5000 and Rs 10,000 per month !

No sudden withdrawals ?  A lost opportunity to catch those culprits ?  What is going on  ?

Then speaking at a rally in Moradabad yesterday , Shri Modiji said :

" I want to tell holders of Jan Dhan accounts , they should neither withdraw nor return this money .

Write to me if someone intimidates you .

The Centre is thinking of how to utilize this money for the poor .... I am thinking hard..... racking my brains to figure out how it ( the money ) can be yours "

Dear Shri Narendrabhai :

In your process of " racking your brains to figure out " , I request you to refer to my following suggestions for your next MASTER  STROKE :

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#  E mail dt 05 Jan 2016 ( Fear of Being Ridiculed ? ) :

     *  No questions ( as to the Source ) for cash deposited in Jan Dhan Bank Accounts (

        Permanent  Unlimited Amnesty  )

    *  FD Interest / Dividends from Infra Bonds / SPVs to be credited to Jan Dhan A/cs

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#  E mail dt 30 Jan 2016 ( Structural Reforms ? )

    *  Perpetual Amnesty Scheme ( no questions asked as to the source for CASH deposits in

       Jan Dhan Accounts , if funds from these Accounts are invested in Govt

     approved INFRASTRUCTURE SPVs  )

        

      So far , Rs 30,000 Crores have been deposited in Jan Dhan Accounts . With introduction

     of this REFORM , that figure will rise a thousand times to Rs 30,000,000 Crores , within

     one year  !

   

    These investments will generate 10 million jobs each year and raise our GDP to 10 % in

    2016-17 ! 

   *  Transferring 10% of GST ( ie 1.8 % out of 18 % ) to PPF accounts of the buyers (

      increase Domestic Savings )

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#  E mail dt 01 Oct 2015 ( From  Greed  to  Great  )

*    Stop asking any questions as to the " Source " for all cash deposits 

      made into bank accounts opened under Jan Dhan Yojana

*    Encourage deposits made into Jan Dhan bank accounts to be invested in

      SOLAR POWER SPV Farms , by direct depositing of income derived ( from sale of

      electricity to DISCOMs ) into those bank accounts

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#  E mail dt 28 Feb 2016 ( Don't Expect This in Budget ! )

*  Come out with ATM V 2.0 ( call it , " Automatic Taker Machine " ? )

*  Install one in every bank branch and at 145,000 post offices ( India Post's Payment

    Banks )

*  ATM V 2.0 does  NOT  " dispense" cash . It only " accepts " cash  !

*  Cash depositor will enter personal details ( Aadhar No / Jan Dhan Bank A/C No etc ) and

    amount being deposited 

*  ATM V 2.0 will count the cash ( much like currently used CASH COUNTERS at most bank

    branches )

*  It will print out a RECEIPT , giving full details 

*  All ATMs ( V 2.0 ) will be inter-connected in a Network having a CENTRAL server

*  All cash deposited ( by every user ) will be used for Infrastructure SPV

*  Depositor will earn annual interest @ 5 % on CASH deposited ( Receipt wise )

* Cash Receipts can be en-cashed upon maturity of 10 years( like FIXED DEPOSIT receipts )

*  Interest will be TAX FREE and get directly deposited in depositor's Jan Dhan Bank A/c

*  No questions ( as to the source of the cash deposited ) will be asked ( Perpetual Amnesty

    Scheme )

I understand , Jan Dhan Yojana managed to garner deposits of approx Rs 30 thousand crores in 18 months

ATM V 2.0 , will bring back those Rs 34.4 lakh*crores of undisclosed assets that are lying in foreign banks ,

AND

Rs 340 lakh*crores of unaccounted BLACK MONEY lying in domestic bank lockers ( or locked up as gold / land )

In deep space , there are BLACK HOLES which suck in all matter . Even light cannot escape from a black hole

ATM V 2.0 will be our WHITE HOLES which will suck in all black money Indians have stashed anywhere  !

Let us use this INNOVATION , which is simply re-configuring  well-established and straight forward HW / SW ! 

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#  E mail  dt  03 June 2014 ( White Holes of Black Money ? )

*  INVERSE  TAXATION   REGIME

    Where one pays DECREASING , incremental  tax , with each higher slab of

    income. This will encourage full declaration of all income and remove 

    incentive to hide income . People will insist upon receiving all payments 

    by cheques . 

    " Reverse  Hawaala " system ( converting black money to white

    money ) will , soon eliminate parallel economy  !

*  AMNESTY  SCHEME

    Where no questions will be asked as to the source of declared black 

    money , if that money is invested in Government-Approved Infrastructure 

    SPVs .

    Dividends / interests from such investments will be free from Income Tax for 15 years .

   

    Infrastructure should also include , Education, Health-care , Sanitation etc

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Dear Shri Narendrabhai :

I repeat my earlier request to give me 20 minutes of your precious time to answer any questions that you may have with regards to my suggestions

with regards,

hemendra parekh

04 Dec 2016

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www.hemenparekh.in / blogs

   

 

Reincarnation of Smart Phone ( with SARAL app )

To accelerate the movement towards a DIGITAL PAYMENT ECONOMY ( or a LESS CASH economy ) , the committee of Chief Ministers set up for this purpose , is convinced that we need to increase the number of smart phones in use , from current 200 million to , may be 700 million

All pre-installed with AEPS ( Aadhar Enabled Payment Service ) mobile app , which the NDA government plans to launch in next 15 days

AEPS will be linked with Biometric identification / Aadhar number / Jan Dhan bank a/c number of the user 

( as suggested in my blog :  How to go Cashless : 27 Nov 2016 )

{  http://myblogepage.blogspot.in/2016/11/how-to-go-cash-less.html  }

It was reported that the Committee debated various methods of putting these additional 500 million smart phones in the hands of the users , including the option of NDA government " buying " these directly from manufacturers and then selling to public at subsidized rates

Even at a modest price of Rs 1000 per phone , that would cost Rs 500 Billion - which the government does not have

And the disaster of Aakash Tablets is still haunting us !

WHAT  ARE  THE  POSSIBLE  SOLUTIONS  ?

I am talking of solutions that do NOT require the government to foot the bill of buying 500 million phones

ONE  OF  THE  SOLUTION :

Using Smart phone as a Service ( instead of " Smart phone as a Product " )

With the arrival of UBER / OLA , cars are changing from " products owned by individuals ",

to " transport service enjoyed by hundreds without owning "

All over the World , car manufacturers are worried at this disruption , where less and less people would want to " own " a car and would rather call for a taxi through a mobile app

It is proving to be much cheaper ( than owning / maintaining ) and more convenient !

So the car manufacturers are asking of themselves :

*  Shall we become a transport service provider , rather than a car manufacturer ?

*  Rather than " sell " a car for a one-time income of Rs 10 lakh , should we sell taxi-service

   worth , a recurring income of Rs 1 lakh per month for 24 months ?

As a first step , we have recently witnessed leading car manufacturers all over the World , tying up with mobile app based taxi services

And do not be surprised if , in the next 2 years , you see taxi service providers getting cars manufactured in their OWN BRAND NAME ! And Mahindra & Mahindra , willing to do that !

There is no reason why this new BUSINESS MODEL , cannot work for smart phones

We have following options :

*  Smart phone manufacturers becoming " Mobile Service Providers - MSP " themselves

*  Mobile Service Providers getting phones made by manufacturers and " bundling " with

    their services ( - although , I believe , this is not currently permitted in India )

*  Mobile Wallet Service providers ( Paytm / Mobiquick / FreeCharge etc ) , providing the

   phones to their subscribers , free of cost or at a highly subsidized rates

*  NDA government entering into a " Revenue Share Agreement " with any of these ( Phone

   Manufacturers / MSPs / Mobile Wallet companies / Banks etc ) , who are willing to ,

   #  Get SARAL phones made , duly pre-installed with AEPS and give away to users FREE

   #  Earn from the Government , 1 % of the " Payment Transaction Amount " as their

       revenue share , whenever the user buys any goods / service , using SARAL ( for the

       Government , this will work as a kind of " subsidizing through deferred payment " )

   

But let us go back to the earlier example of cars ( Individual Ownership vs  Collective Usership , ala Uber / OLA )

Why do people need to " OWN " a phone ( AEPS pre-installed ), in order to be able to " USE " it ?

People who make their purchase payments using Credit / Debit cards , do NOT own their personal PoS machines / Card Readers !

The SELLER owns those machines , kept on his counter

And allows the BUYERS to use these while making payment

With AEPS duly " integrated " with Aadhar-based BIO-METRIC device , linked to user's bank account , there is no technical reason , why a BUYER cannot use an AEPS installed phone , lying on the counter of the SELLER !

When he is carrying his EYES - and his Aadhar Card - there is no need for him to " OWN / CARRY " his own EYE - READER ( smart phone ) , wherever he goes !

Just look into the camera of the SARAL phone lying on the sales counter , speak your Aadhar Number , then speak payment instruction !  As SARAL ( simple ) as that, until smart phones start reading your unspoken thoughts !

And putting a 100 million SARAL phones ( pre-installed with AEPS ) , into the hands of SELLERS , is much easier / faster / cheaper than placing 500 million phones into the hands of USERS !

With this innovation ( shrinking and morphing a bulky PoS / Card Reading Device to a tiny SARAL phone , pre-installed with AEPS ) , there is an opportunity for manufacturers of these devices to " re-invent " themselves !

Now is the time to make themselves obsolete , before someone else does !

If they don't , they are cooked !

And , since Credit / Debit card Issuers too are on the verge of " going into oblivion " , they would be happy to tie-up with PoS / Card Reader manufacturers , to implement my suggestion

They can still survive , if they ensure that those MORPHED / SHRUNK devices ( called SARAL phones ) , enable millions of illiterate Indians to make their payments , just by " talking to the phone ( lying on the SELLER's counter ) " , in a language of their choice !

If they succeed in pulling off this innovation ( of spoken instructions ) , they have a good chance to beat existing Mobile Wallet companies

Dear Shri Amitabh Kant :

If asked , Sundar Pichai ( Google ) would gladly combine " Google Talk "  with " Google Translate " , to come up with a  " SARAL " app which can be integrated into AEPS !

This  SARAL  avatar of a Smart phone , has tremendous scope for export all over the World .

I hope , the Members of the Chief Ministers Committee , find time to debate my suggestions

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03  Dec  2016

www.hemenparekh.in / blogs