India the golden sparrow again

THE STORY OF THE SPARROW by Raymond Federman

On a beautiful winter day in Siberia, encouraged by the warm rays of the sun in a clear blue sky, a little sparrow left the security of his nest to fly and frolic in the air, but the 40 below zero temperature quickly overcame the imprudent bird who fell to the ground, frozen, and found himself buried in the snow where he would certainly have died in an instant. But by chance a cow trotted by at that moment, and at the very spot where the sparrow was struggling for his last breath, she dropped a large soft cow-dung on top of the bird. The warmth of this dung-bath resuscitated the moribund sparrow. He was so happy, he raised his head out of the cow-shit and started to twitter joyfully, which drew the attention of a wandering homeless cat who delicately pulled the sparrow out of the shit and devoured him.

The moral of this story: 

Your enemy is not necessarily the one who shits on your head.

 Your friend, however, is not necessarily the one who pulls you out of the shit

 And besides, one should never twitter when one is buried in shit.

You will feel why I writing this story? This is blog of demonetisation / reforms and not some motivation session. 

For better understanding replace the following in the above story

sparrow with the general public , the so called aam aadmi, basically people like us

40 below zero degrees temprature with black money,corruption and inflation.

 cow dung with demonetisation, GST, linking of aadhar card with Pan No.

 twittering of sparrow with the whining by all who got shortchanged and caught with their pants down due to demonetisation.

 the homeless cat with the opposition parties and self styled economist who only worried about themselves for political mileage

if you still have problems in understanding the meaning of this story in my blog then obviously this blog is not for you

Decide now  " we want to be a  sparrow saved but ultimately becoming food for the cat or a sparrow flying even higher

Now let us talk Demonetisation 

Post 8th November 2016 India saw birth of many self styled Economist. They had every possible criticism of demonetisation. Across all political parties and Award Wapsi Gang and Libtards reacted as if it is end of country. They tried every possible gimmick to turn common man on street to build narrative against PM but failed miserably 

Lately RBI came out with report that 99% of notes back in system. As if these critics ere waiting for this opportunity they started their best past time" propaganda against Mr Modi and RBI

 Critics of demonetisation make two major arguments against it. One, that it was expensive, ill-timed, unnecessary. Second, that it did not root out black money and the move has failed since all the money has come back. There is one major counter argument to this. 

First let us check these verified figures by PIB 

Quantum jump in Enforcement actions based on Demonetisation data:

Searches 

·         158% increase in number of searches (from 447 to 1152 groups)

·         106% increase in seizures (from Rs. 712 crore to Rs.1469 crore)

·         38% increase in admission of undisclosed income (from Rs.11,226 crore to Rs. 1,54,96 crore)

       Surveys

·         183% increase in surveys (from 4422 to 12520)

·         44% increase in undisclosed income detected (from Rs. 9654 crore to Rs. 13920 crore)

18 lakh suspect cases were identified through use of data analytics where cash transactions did not appear to be in line with the tax profile of depositors.

 The exercise has also unearthed large number of persons and clusters having suspect transactions.

14,000 properties of more than Rs.1 crore each where persons have not even filed Income Tax Returns.  The investigations are in progress.

The number of e-returns of Individual taxpayers filed till 5^th August, 2017  increased to 2.79 crore from 2.22 crore returns filed during the corresponding period of last year, 

This is registering an increase of about 57 lakh returns (25.3%). 

  The total number of all returns (electronic + paper) filed during the entire Financial Year 2016-17 was 5.43 crore which is 17.3% more than the returns filed during FY 2015-16.

·         

Collection of Advance Tax under Personal Income Tax (i.e. other than Corporate Tax) as on 05.08.2017 showed a growth of about 41.79% over the corresponding period in F.Y

 Collection of Self-Assessment Tax under Personal Income Tax showed a growth of 34.25% over the corresponding period in F.Y. 2016-2017.

Fifty-six lakh new individual tax payers, a 34 per cent jump in self-assessment tax by individuals give some hope on tax compliance.

 Inflows into mutual funds of Rs 1.7 lakh crore between November and June this year compared with Rs 9,160 crore is a glimpse on financialisation. 

The 350 crore transactions in debit and credit cards valued at Rs 6.6 lakh crore last fiscal was higher than the Rs 4 lakh crore a year ago is a sign of what's happening on digitisation. 

These are figures you must have read.but surprisingly no one discussing

Anil Bokil of Pune-based Artha Kranti Pratisthan, an early votary of demonetisation, has defended the benefits of the move. Bokil told that there was a huge ‘cash bubble’ and if demonetisaiton had not happened, India would have been hit like the 2008 subprime crisis in US. 

 Now let  us understand what has demonetisation done to money hoarders

Night of November 8th proved that Mr Modi under estimated the brains of Indians so well fed by corruption. This is gift of Congress to India. Exchange of notes at rate as high as 40%, gold selling at 75k per 10 gms and real estate deals.

Yes due to few corrupt bank officers demonetisation took a jolt. The black money just changed hands. 

Now let us see what happened then. HNI and others sitting on exchanged notes had a sigh of relief. 

" OK we lost 40% of our wealth but we still have 60% intact new notes"

Now the situation is they are having sleepless nights. why?

They cannot use this currency to buy any luxury item as the report goes to government

They cannot afford to take international travel. Every travel is being monitored on amount paid on tickets and currency exchange

Real estate is in bad state. And RERA and NITI AAYOG decision to reduce stamp duty further dim their chance of investing in real estate

Gold norms in place. Poor guys who bought gold at such high price are already 50% down and that is also like nothing. The moment they go out to sell they being monitored

All transactions of converting black to white are under scanner. May it be through purchase of shares or routing through shell companies. Already 3 lac shell companies under scanner

To cut it short the money with them is only for shopping in a mall. Interestingly there also government gains as GST which cannot be claimed back by them as it is unaccounted money. That is huge if you see in long term

I know it is foolish to underestimate corruption in India  There would still be crooks who find ways to evade tax and generate black money. There is a huge army of people who thrive on advising people how to escape tax - consultants and auditors. India has a penal code, but that hasn't stopped rapes and killings. So, will it be with financial laws. 

But do not make mistake of underestimating Mr Narendra Modi. He has resolved to catch hold of black money and he will do so.



I still remember my meeting a banker from London who said

" UK needs demonetisation . Wish we had leader like Mr Modi'

And we have likes of Mr P Chidambaram whose government is world famous for corruption but still has guts to point finger at Mr Modi. I dare him. " EVEN IF 99% MONEY RETURNED TO SYSTEM THAT ITSELF WILL MAKE ECONOMY MOVE. AT LEAST THE MONEY IS NOT IN LOCKERS'

Demonetisation and GST are game changers for our economy which was on ventilator in 2014 when Mr Modi took oath as PM.

Just have patience and you will soon realise the upsurge in GDP and tax base in coming quarters