Presentation on Demonetisation - Patna

1. Modi’s failed war on “Black Money”.
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2. What is “Black Money”?
1. Money earned by illegal ways – crimes like
smuggling, theft, dacoity, drug rackets etc.
Corruption.
2. Money earned by legitimate means but on
which taxes due are not paid by under-
declaration, evasion and concealment.
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3. How big is the “black” economy?
 The previous NIPFP official study commissioned by the government
in 1985 estimated it be equal to about 21% of the GDP in 1984 or Rs.
36418 crores out of a then GDP of Rs. 173,420 crores.
 In 2014 India’s GDP is estimated to be over $ 2.047 trillion
($1=INR67) or about Rs.100L crores.

 In 2014 the Government of India was expecting to collect taxes and
duties amounting to Rs. 13.64 lakh crores.
 This only means it is not collecting additional taxes and duties
amounting to about 75% of this, other words about Rs. 10.4 lakh
crores. This is huge sum and any government will drown in
salivation thinking about all the good it can do with that money.
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5. Kitne the’ wo?
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6. How much money is out there?
As of March 2016, the total value of notes in
circulation was Rs. 16.42 lakh crore, of which
around Rs. 14.2 lakh crore (86%) was in form of
Rs. 500 and Rs. 1000 notes.
The Rs.1000 and Rs.500 notes account for 7%
and 17.4% respectively of the currency in
circulation.
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8. Counterfeit money
In 2015-16 of the counterfeits detected, only
415 were in 500’s, 35% in 100’s and the rest in
1000’s.
Of the 9026 crores Indian currency notes in
circulation in 2015-16 , no more than 63
lakhs– that is 0.0006% were detected as fake,
according to the RBI.
The value of these fake notes in 2015-16 was
Rs 29.64 crores, which is 0.0018% of the Rs
16.41 lakh crores currency in circulation.
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15. Round tripping back to India.
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16. How is black income kept?
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1. Land & buildings 46%
2. Gold & jewellery 26%
3. Foreign holdings 24%
4. Cash 4%

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21. How many are affected by note withdrawal?
India has a work force of close to 450 million. Of these only
7% are in the organized sector. Out of these 31 million about
24 million are employed by the state or state owned
enterprises, the rest being in private sector employment.
Of this vast reservoir of over 415 million employed in the
unorganized sector about half are engaged in the farm sector,
another 10% each in construction, small-scale manufacture
and retail.
These are mostly daily wageworkers and mostly earning less
than the officially decreed minimum wages. Thus, a good part
of this so-called “black money” held in Rs.500 and Rs.1000
notes the government has choked off is actually money in flow.
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22. Average daily wages.
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26. What is the cost of this Modiness? -1
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A Rs.100 note normally has a life of 1000 uses or
transactions before it has to be destroyed. The loss is the
cost of printing a new note.
If the same number of transactions were by credit or debit
card, or by systems like PayTm etc there will be service
charges@ 2.5% for each transaction. Most of this money
will go abroad.
So the cost of 1000 transactions will be Rs.12,500.
Then add the cost of internet and mobile phone charges @
20 p per transaction. Add another Rs.2000. A
Add to this the cost of lakhs of new terminals each year,
imported from China.

27. What is the cost of this Modiness? - 2
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At least 2% loss of GDP.
In money terms this would be over Rs.2 lakh crores.
At least 22 crores daily workers have suffered loss of
jobs.
Biggest sectors hit are farm and construction labor
who have each lost 3-4 crores job losses.
Tens of lakhs of small farmers, particularly vegetable
and fruit growers have lost crops due to fall in
demand.
About 2 crores small retailers have suffered huge
losses

28. The Cost of New Money.
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30. What has Modi realized?
Out of the Rs. 14.50L crores in high value notes
Rs.13.12L crores have been deposited in banks.
The Modi government was expecting to realize
between Rs.4 to 5L crores as un-deposited funds.
This is not happening.
Rs.2000 notes in large quantities have been seized
from several cities.
Even terrorists in Kashmir have been killed with new
Rs.2000 notes.
Modiji ka sundar sapna beet gaya!
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