Location: WhatsApp images, then Living room couch in front of the TV News channels
Time and Date: 9:00 PM, 8th Nov 2016
Scene: Narendra Modi, announced on the news that the current
existing 500 and 1000 Rupee notes are no longer valid. There will be new notes
available to use in a couple of days.
My God!! The balls of that man to yank the plush carpet from
below the feet of those non-tax-paying-illegally-cash-hoarding-enjoying-India-but-complaining
Indians… Phew that was a long adjective. I removed some expletives btw ;). I
was rejoicing, laughing and actually exuberant. Finally, somebody has the guts
to pull the plug on the nonsense that was rotting India from its roots. A vast
majority of the population of India (read 99%) does not pay taxes. Only 1% of
the middle class salaried and some businesses pay taxes. WOW, what a huge
burden to bear. A population of 12.5 Million catering to the needs of a
staggering 1.2 Billion. It was a true WTF situation. I am sure that there are
several like me who used to complain that in spite of paying the highest taxes,
there is nothing we get to enjoy. We are levied with more and more taxes and
then there are the others, who don’t pay a single naya paisa as tax, enjoy all
the benefits, and still complain about India not progressing. I hated those
people, I hated India for not doing anything about the situation. I felt
helpless and those in power, were too busy in their selfish motives to do
anything to change the system.
India wants to stand and compete against, USA, China, Japan,
Germany, but, how can we? Without money, nothing moves and the Government has
only one source of income – Taxes. A staggeringly large amount (10-15%) of
Indian GDP is running in black money. Counterfeit notes sponsoring terrorism is
another menace. There was only one solution – change the root cause – change the
way the money looks and operates. But who would do that. I had never expected
the Congress Government to do it. No sense cutting off the hand feeding you
right! Well in all fairness I must give them credit for discontinuing the 25 Paisa
coins. I am still stuck with 200 Rs worth of those btw.
So, coming to the way it happened. I admire the timing and
the execution. Night 8 PM – no chance of after-hours trading, Forex, or even
gold to a large extent. The impact was immediate. You had 4 hours to dispose
your black money. 4 hours to discard income from the last 40 years or the last
4 months. Some smart, conniving people invest their black money immediately and
hence were at peace. People like me, who give up tax before getting any income
were at peace. The rest of India panicked. People ran to jewellery stores and
they made a killing of the foolish mindset people had. They charged a premium
for selling gold. It went for as high as 55000/- for 10 grams!! And maybe
higher. Donations flooded the Temples and trusts. What stupefied me was that
are these people foolish?? Do they really think that the entire economic brain
power of India wouldn’t think that this will happen? Of course, they did. And
what further surprised me was the fact that people were ready to pay 50%
premium to a jeweller but not pay tax which is a mere 30% to the government.
Example – Let’s say you purchased jewellery worth 2 Lakh rupees at a premium of
50,000 per 10 grams. So, in effect you purchased roughly 40 grams. On a normal day,
you would have paid around 1,20,000/-, saving a staggering 80,000. If you
deposited that black money into your account then the government would have
taxed you at 30%, which still amounts to only 60,000 of the 2,00,000/-. You
still get to use 1,40,000. Math and logic clearly indicate that paying the
Government was the lesser of the two evils. But hysteria makes you do insane
things. And here comes the punch line – All transactions above 2 lakh rupees
done from the day of announcement are to be scrutinised, especially at
jewellers and Trusts.
Yes, I am happy a step is taken by the Indian Government in
the right direction, to relieve me and the other 12.5 Million people like me of
the burden we were facing. Things should get easier even if it means only for
the short term. SHORT TERM?!?! I know you are surprised but yes, this might
very well be short term. Here’s why
- Had the notes been laced with some kind of tracking device, as the rumours were and as I was so proudly beaming about, then it was a long-term solution but they aren’t. These are the same old vanilla paper notes with the highest security measures in place. But those security measures come into effect only when you deposit something in the bank, for regular day to day transactions it’s not so much of use. Very few people might actually know of the means to check those security features.
- Most cash businesses tend to settle their “incomes” by end of March and they start arranging for settling it by December. In this case, PM Modi has struck gold with his timing. They might be hit the hardest. But that solves the problem only for this years income. Come April 1st, 2017, they are back to their old ways of fooling the government for the rest of the year. I don’t see how they will be afraid in continuing their old illegal ways to conduct business. Especially, when some of them made a profit even in this crisis, by offering to convert your illicit income into legitimate one at a premium of 50 %!! Again!! Why don’t people just live an honest life ugghhhh.
- All terror sponsoring within India, is temporarily jolted, yes. It’s a big boost, considering we expect a rise in such activities after the surgical strike, but again it’s just temporary. The same outfits circulating fake notes, will start with a new project, now copy the Rs 2000 notes. It might take some time and maybe they are destabilised, but they will resurface again. And it sends a chill down my spice. After all this hustle bustle of changing the notes and a huge hit in printing the new notes and destroying the old ones, they will still come back!!
This step in the right direction, according to me needs
teeth. Like all other Indian legislation, if it falls flat on its face, then I
will be truly disappointed. I was truly hoping that the notes were laced with
trackers. The technologist in me was jumping with joy because it’s a unique
achievement. The Indian within me was smiling ear to ear, because I was finally
able to track the path to my progress in those trackers…
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