Rahul Mehta Gandhinagar LsCandidate
(1) Removing Rs 500 / Rs 1000 notes - I do NOT oppose this step. Please note - I DO NOT oppose this step. It has small cost (Rs 10 to Rs 20 for every new replacement note printed and bank charges). And I never oppose any step from PM / CM / Ministers whose costs are small and inconvenience they cause to honest men is small. So I dont oppose step to remove Rs 500 / Rs 1000 notes.
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(2) Total currency with public = Rs 17,000 billion = Rs 17,000,000 million = Rs 1700,000 crore = Rs 17,00,000 crore = about Rs 13000 per indian citizen = Rs 20000 per adult Indian citizen. (see RBI data, population of India = 130 crore, adult population = 85 crore) . Now some 80% of it is large notes. That makes it about Rs 16000 per adult Indian. And a large portion is all shining white (like my Rs 70000 is all shining white) and they will all walk to bank within a week.
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(3) 30-dec-2016 is last date for depositing Rs 500 / Rs 1000 notes. Now if all or say 90% of Rs 500 and Rs 1000 notes that have been issued come back to banks, then it will prove that all black money got converted into white with some losses !!! So by 30-dec-2016, we will have clear answer on how much has been the real effect.
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(4) Will there be advantage ? If yes, then first place should be land / flat prices. The land / flat prices have been decreasing since jan-2014. Because they were all too too high and real buyers were not in position to afford them. But will land prices decrease SIGNIFICANTLY due to removal of these Rs 500 / Rs 1000 notes? Lets see how much land pries decrease after 3 months and regain after next 6 months
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(5) Most builders i.e. flat sellers these days ask for some 20% to 30% cash and rest cheque. Most land sellers ask for 40% to 50% cash and rest cheque. Will this % come down in next 3 months to 6 months? We will know for sure in 6 months. And will these % stay low there after? It will be one year to get sure answer/
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The benefits will be imo (imo = in my opinion) --- small WHY? I have explained later.
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First , what is black wealth? Black wealth is wealth accumulated after black income. So what is black income? Income on which I am not paying taxes. Please note --- if I collect Rs 1 crore by illegal activities like crimes, and then pay 30% taxes and convert them in white, then unless crimes are proven, this income is deemed as white income !!
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Now following are sources of black income
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(1) under stating sales - a factory sells goods of Rs 1 crore, takes say Rs 60 lakh cheque and Rs 40 lakh cash , Then Rs 40 lakh cash is black income.
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(2) crime income - but again, if a person pays taxes and using other means convert into white, then that income income is white till crime is proven, and it is shown that income is from crime, and court issues a confiscation order
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(3) corruption - the bribe income of all judges, IAS, IPS, ministers etc is black on day one. If they pay taxes or using other means convert it into white, then it is white till proven black.
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(4) land owners who have nexuses with corrupt IAS / Ministers - these land owners are bigger than all Ministers / IAS put together !!! Most of them are now foreign elitemen and Missionaries !!! The landowners bribe IAS / Ministers to convert agricultural land into non agricultural using town planning scheme and so prices of their plots go 10 to 100 times. All this income is black on day zero, but becomes white on day one, after simple transactions !!!
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Ways of storing black wealth
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On day one, the black income is cash. But every large black money hoarder converts cash in gold on monthly basis. And then into land on yearly basis.
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Other ways are moving cash to Mauritius, Fiji, Singapore, Luxumburg, Switerland and some 30 countries across world.
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How much of black wealth is stored in cash?
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Total cash in India as per RBI is Rs 17000 billion = Rs 17,00,000 crore = Rs 14000 per Indian citizen. = Rs 20000 per adult India. How much is black cash?
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How much is value of private land in Ahmedabad?
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Ahmedabad is some 400 sqkm = 400 crore sqft. Say 40% of land is used for public space and so private land is 60% i.e. 240 crore sqft. Taking low ball of Rs 10000 per sqft, that private land's market value is Rs 24,00,000 crore, more than ALL the cash of whole India !!
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And Ahmedabad is small fish -- consider Mumbai, Delhi, Bangalore - they are 10 times to five times larger than Ahmedabad.
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REAL solution to black wealth
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(1) Deemed auction on sale of land --- Litiva and many countries have 0% cash in land sales. Why? Because Lativa has law that if Y buys land from X for Rs P, and if Z offers 10% more, then govt will sell land to Z and give 5% extra (or sometimes 0% extra !!) to Y !!! So no Y will offer cash for land.
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(2) wealth tax - the wealth tax forces land owners not to hoard land. So prices go down. So the most powerful means to hoard black wealth become non-means.
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(3) Public disclsourer of all land ownership records
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(4) Forcing all Switerland , Mauritius etc countries to make bank information public - long haul because this needs Indian Military that can crack down on Switerland etc.
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