Demonetization – Speech to reality

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भाइयों और बहनों It gives me immense pleasure to announce that:

All Black money found in Ganges

Terrorist gone underground as their funding stopped

Stone pelting stopped

India on digital money

All नकली note out of system

Corruption died its own death.

Before getting to the topic please go through the series of events unfolded between November 16 and August 17 – Courtsey Business Standard

http://wap.business-standard.com/article-amp/economy-policy/rbi-annual-report-99-of-demonetised-currency-back-into-the-system-117083000891_1.html

November 9-10, 2016: Banks and ATMs remain closed to prepare for changes needed in the system after demonetisation. Govt had announced that any bank deposits of more than Rs 2.5 lakh would face tax and penalty.

November 14, 2016: Govt extends deadline for accepting scrapped notes for public utility and fuel payments until November 24. Queues get longer at ATMs. Cash withdrawal limit for current account holders increased to Rs 50,000 a week. Charges on ATM transactions waived until December 30. Cash crunch continues. Parliament House ATMs also run dry.

November 16, 2016: SBI says it collected Rs 1,14,139 crore in deposits in 7 days.

November 21, 2016: Banks report exchange/deposits from November 10 to November 18 amounted to Rs 5,44,571 crore – Rs 33,006 crore exchanged and Rs 5,11,565 crore deposited. They also report that the public withdrew Rs 1,03,316 crore from their accounts either over the counter or through ATMs.

November 24, 2016: Govt withdraws exchange of old currency notes and extends deadline for exemptions until December 15 midnight.

November 26, 2016: Deposits in Jan Dhan accounts soar sharply by around Rs 27,200 crore to Rs 72,834.72 crore in just 14 days.

November 27, 2016: Rs 32,631 cr deposited in post offices since the announcement of the demonetisation decision.

November 28, 2016: RBI says banks have got about Rs 8.45 lakh crore worth of scrapped notes

December 7, 2016: RBI Governor Urjit Patel says demonetisation was not done in haste. Note ban impact on GDP growth estimated at only 15 bps. RBI says Rs 11.55 lakh crore, or 76 per cent of junked notes, have come back into the system

December 13, 2016: RBI Deputy Governor R Gandhi says banks had collected Rs 12.44 lakh crore worth of deposits in banned notes until December 10.

December 19, 2016: RBI says in the remaining days of the month one could make deposits in Rs 500 and Rs 1,000 notes in excess of Rs 5,000 but only once for every account.

January 18, 2017: Governor Patel fails to answer queries on deposited banknotes. He, however, confirms RBI injected Rs 9.2 lakh crore worth of new currency notes into the banking system to help replace the banknotes banned in November.

March 10, 2017: RBI’s Macroeconomic Impact of Demonetisation report says the precise estimate of currency returned to the banking system was not yet available as the reconciliation process was still on.

July 4, 2017: Supreme Court asks the government and RBI to consider granting a window to those who has not been able to exchange scrapped Rs 500 and Rs 1,000 notes for genuine reasons.

July 13, 2017: Governor Patel, appearing before the Finance Standing Committee of Parliament, says the notes deposited after demonetisation are still being counted

August 2, 2017: Finance Minister Arun Jaitley says RBI is in the process of counting scrapped currency notes and will come out with the final figures once the fake notes are weeded out.

August 11, 2017: Describing the impact of demonetisation on the Indian economy in the Economic Survey-II, Chief Economic Advisor Arvind Subramanian says there has been a 20 per cent reduction in cash in the economy.

August 12, 2017: A paper, ‘Demonetisation and Bank Deposit Growth’, says ‘unusual’ cash deposits in specific accounts that are usually less active is estimated at about Rs1.6-1.7 lakh crore.

August 15, 2017: In his Independence Day speech, PM Modi says demonetisation of old notes led to at least Rs 3 lakh crore of undeclared income coming into the banking system.

August 16, 2017: Congress accuses PM Modi of contrary stand on black money recovered. It says he first announced an additional Rs 3 lakh crore had been brought into the banking system, and then said about Rs 1,25,000 crore black money was recovered

August 27, 2017: Data put out by RBI on its website suggest that at least for the Rs 1,000 notes, almost 99% of the currency in circulation had come back into the banking system

August 29, 2017: Several members of a parliamentary panel seek re-drafting of the draft report on demonetisation as RBI is yet to provide some crucial details, including on the number of junked Rs 500/1000 notes.

I leave up to readers to perceive from the above sequence of events.

Just after RBI published their Annual Report on 30th August comments from different quarters started coming

Some do not understand demonetization” is what our Finance Minister has to say, actually its a question and suspense for him and his inability to defend what he has not done. The one who confidently understood will never take the onus of pain suffered by only those having no black or white money. Few endorsements surely benefited e-wallet business and also ensured benefits in state election. There are certainly some positive outcome of demonetization like tax base rise, more accountability etc. but the cost which the nation has paid is huge. One percent loss of GDP itself amounts to 1.25 Lakhs Cr., which is a huge amount to fiddle with and is not one time. Some would not realize, but within the span of 3 months there is no estimate of domestic trade and production  loss that we suffered.

While taking credit of increased tax base, an additional 93 lacks tax returns are filed is been reported whereas if we see the trend from last actual data available (FY2012-13) in which its evident that out of 5.3Cr returns only 1.7Cr were tax payers i.e. about 32 percent, keeping in mind the same trend only 30lakhs additional tax payer added which also includes natural growth of increase of tax base. Its not worth an addition at such a huge cost of demonetization. The better way to understand this is to look at Direct Tax to GDP ratio which in FY14-15 was 5.7% and in FY16-17 is 5.8%

The idea behind excess money received by banks resulting a healthy state of affairs when they are in position to lend it further but is one look at credit growth of banks which was at 60 years low in Nov16 went onto negative side by July17, this was primarily because of low capacity utilization, which was about 70% in that period resulting low investments, in nutshell not only un-organised sector but also the organised sector got a hit. The worst hit among all were the farmers. Agriculture, a sector which largely operates on cash, with farmers not being paid enough for vegetables and pulses they had grown. Many protested and several state governments waived payments on farm loans.

Less cash economy is a good thing to have but cannot be achieved through demonetization, it would require years to develop as a habit rather force and helplessness.

Counterfeit notes are all back in system and lets wait for this figure to come out from RBI, as what is the actual amount of counterfeit notes

I would not like to comment on corruption and patriotism attached to demonetization as this logic is beyond my imagination.

As far as our current government is concerned, it is unlikely anyone from government will admit it was a big mistake and will continue to put a positive spin on it, as it has been done since November16 and nothing is gonna change on this front as governments are not use to admitting mistakes.

To conclude, no relatively healthy economy has ever carried out demonetization.

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Hinduism A Way of Life

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Hinduism is considered to be the oldest religion that exists and also different from other monotheistic religions in practice. Hinduism is practiced majority in India while Nepal use to be only Hindu country prior to been resolved as Federal Democratic Republic. Aside India and Nepal, Hinduism is practiced throughout the world by immigrant from India. In terms of world’s population it stands one out of seven or in other words, has got third largest followership.

As I am a born Hindu, have realised over age, is a philosophy rather henotheistic practice which has certain boundaries limiting the core essence of this religion. North India believes in complete ownership of practices whereas south and west India demonstrate cultural superiority. Its because of polytheistic nature of this religion the geographical and cultural differences also reflects in their practices.

Hinduism is deeply attached with mythology resulting evolution of stories having same myth with different versions. The concept of Creater, Preserver and Destroyer have their names as Brahma, Vishnu and Mahesh (Shiva) respectively are main deity(es), they or their avatars are being worshiped in some way or the other. Its an un-orthodox religion with almost no compulsions while practice, not even worship, has also given path for their followers to carry out their own set and has also resulted in formation of new religions.  Its evident that most monotheistic religions in practice have some rituals or methods to perform by an authorised, if someone wants to adopt, whereas only by way of practice one can be a Hindu if not by birth “Its a way of life”

Truth is eternal, The way of living your life in path of this eternal truth is Dharm. All souls are immortal “Aatma” or can be interpreted as God is inside each of us and is connected to this universe “Brahmand”. The life is to find out the connection between Aatma and Brahmand through “Karm”, good deeds/ bad deeds which influence the path that we follow. Hinduism also believes in reincarnation/re-birth and one’s next life is based upon “Karm”, better in deeds, better the next life and vice versa. In order to release or liberate the soul from this cycle of re-birth, one has to find out its own eternal truth called “Moksha” Freedom from Life and Death through Dharm in her/his life through Karm.

The whole idea of Hundism is to search for the eternal truth by following the “Dharm” and perform “Karm”, a path of knowlwdge, perform your duties, your devotion to society to liberate your soul from constant cycle of reincarnation and free your soul from all the pain and sufferings of life i.e. Moksh or to meet with your God.

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Convenience and Ideology in Politics

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Political parties in India and in general across countries are formed either on certain ideology or with some social-economic agenda or based on certain goal or for some specific purpose or on religious-caste lines. The inception of these parties are mostly on right memorandums and their founders always want to stick with it. Since India is a big country and hugely populated, these political parties want emerging and existing people from political fraternity to join them, take it forward along, but the representations within political parties on a broader level dilutes the essence and its ideology, agenda, goal and purpose. Its the magnetism of power, money and position which overshadows everything and convenience takes over their core political agenda and its evident that even two extreme ideology join each other. There are no surprises when it comes to acquisitive exchange of power and position, even who fought elections against each other, join hands. There are also evident cases where a party fighting election against the one in which a member of that party was an incumbent minister.

The social fabric of India is mainly based on religion, language and caste also there is now a new distinction in society on economic level where these parties carry no ideologies, rather they exploit the social-economic fabric at micro and broad levels to grab power and position.

There are seven national parties and about 50 odd regional/state parties in India. The history has got its evidence that the party at locus tends to attract members of non-ideological parties converge to find their suitable point of match with political justifications. The convenience overcomes ideology.

There is no harm in politicians wanting to be near post and positions, ultimately the essence of the profession itself is to service the citizens which can only be done by being in business and while doing so they first have to leave the high grounds of ideology. I personally have not witnessed any political party working on its main ideology ever since I started following politics.

 

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Badminton in India – A New Chapter

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World Badminton Championship 2017 has started a new chapter in Indian badminton as this is the first time that two iconic players from India has shared top three positions. A proud moment for us to have P.V. Sindhu and Saina Nehwal as inspirational figures for new upcoming players.

There’s no denial of the fact that cricket still is most watched and played sport in India. But ever since players like Nehwal and Sindhu in guidance of Pullela Gopichand started winning major tournaments, it took giant steps in bringing more youngsters into the courts with racquets.

Badminton first gained popularity in the country in the late 70s and 80s which was the time when players like Prakash Padukone and Syed Modi came into the limelight. Prakash Padukone became the first Indian to win the All England Championships. The duo also won medals in other international events like the Asian Games and the Commonwealth Games.

Then after there was a gap and badminton as a game lost it grounds of popularity, there were players reaching up to some level of recognition but no one could retain and maintain their positions in international level.

The major turnaround in Indian badminton came when All England Champion Pullela Gopichand started his academy in Hyderabad and Saina Nehwal became the first iconic player to maintain the position for almost a decade. She is like Sachin Tendulkar of badminton who remained an inspiration to young players. The legacy of Saina Nehwal is now been carried further by P.V. Sindhu and India is now at the doors of International league to challenge East Asian dominance in this game.

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