Posts tagged ‘Banknote’

15/11/2016

The Economist explains: Why India scrapped its two biggest bank notes | The Economist

In a surprise televised address on the evening of November 8th, Narendra Modi, the prime minister of India, delivered a bombshell: most of the money in Indians’ wallets would cease to be accepted in shops at midnight. The two most valuable notes, of 500 and 1000 rupees ($7.50 and $15), were to be “demonetised”, economist slang for taken out of circulation. Indians have until the end of the year to visit banks to either exchange their cash against newly printed notes or deposit it in their accounts. After that, their notes will become mere pieces of printed paper with no value at all.

Citizens and businesses face weeks or months of disruption as the new currency stock is deployed. So why bother?

The government justified the move in part due to concerns over a proliferation of counterfeit notes (not unusually, it pointed the finger at neighbouring Pakistan), which it claims is fuelling the drug trade and funding terrorism. But its main impact will be on “black money”, cash from undeclared sources which sits outside the financial system. Perhaps 20% of India’s economy is informal. Some of that is poor farmers, who are largely exempt from tax anyway. But the rich are perceived to be sitting on a vast illicit loot. Though a large part of that sits in bank accounts in predictable foreign jurisdictions, a chunk of it is held in high-value Indian notes. Purchases of gold or high-end real estate have long been made at least in part with bundles (or suitcases) of illicit cash. The impact of the move is that everyone will have to disclose all their cash or face losing it. Those with mere bundles of 500 rupee notes clearly aren’t the target: the government has said tax authorities won’t be told about deposits of less than 250,000. But those who have stashed large piles of notes are in a bind. A recent amnesty programme for “black money” has just passed meaning the tax man is unlikely to look upon undeclared cash piles with sympathy.

The question is not whether the scheme will work but whether the cost of implementing it is worth it. The notes being nixed represent 86% of all cash in circulation: everyone is impacted. Queues have snaked around banks for days as Indians have tried to convert their notes into new money. And the “black money” hoarders have ways to liquidate their loot, for example hiring lots of people to deposit their notes into their own accounts and then send it back, all for a fee. The benefits are hard to gauge for now. The government is keen to be seen to be cracking down on tax-dodgers on behalf of the “common man”. But if the poor fellow then has to spend his days (like your correspondent) scouring the streets for an ATM that works, he may end up wondering if he is a beneficiary of the scheme or its victim.

Source: The Economist explains: Why India scrapped its two biggest bank notes | The Economist

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03/10/2016

India joins Paris Climate Change Agreement, submits instrument of ratification at UN headquarters – Times of India

With the US, China and now India signing the accord, other nations should not hesitate to join them. On any case, thes three account for the vast majority of the pollution, so even if no one else signs up, its good news for Mother Gaia.

India formally joined the Paris Climate Change Agreement by submitting its instrument of ratification+ at UN headquarters in New York on Sunday – the birth anniversary of Mahatma Gandhi.

The instrument of ratification was deposited by India’s permanent representative to the UN, Syed Akbaruddin.

By putting Gandhi seal on the climate deal, the country will now urge the global community to adopt ‘Gandhian way of life’ (shun extravagant lifestyles) to reduce their carbon footprints and protect the earth from adverse impact of climate change.

India will articulate its point vigorously during the next climate conference (COP22) at Marrakech in Morocco, beginning November 7.

“India had led from front to ensure the inclusion of climate justice and sustainable lifestyles in the Paris Agreement+ . We will put across this view based on Gandhian lifestyle in Morocco”, said environment minister Anil Madhav Dave.

Spelling out next course of action after India formally joined the Agreement, Dave said, “It is important that apart from emission cuts, we also focus on measures that involve broader participation. People in developed countries live extravagant lifestyles with high carbon footprint.

“Simple everyday changes in lifestyles, when practiced by a large number of people around the globe, collectively will make a huge impact”.

Source: India joins Paris Climate Change Agreement, submits instrument of ratification at UN headquarters – Times of India

10/12/2013

Business of new and worn banknotes thriving in Delhi: India Insight

Rakesh Kumar is not like most of the street vendors in Old Delhi. The hand-painted sign on his wooden counter, “exchange damaged, old notes,” reveals a different story. He sells money.

For the past 40 years, Kumar has offered customers new banknotes for soiled or damaged ones for a fee that earns him about 100,000 rupees ($1,600) a year. It has also helped him pay for the marriages of his three children.

“We charge commission depending on the condition of the note,” the 58-year-old Kumar said while examining some 1,000-rupee notes nibbled by rats. “Around 30-40 people come to us daily.”

Getting fresh banknotes or using soiled ones can be difficult in India. Shopkeepers and other merchants routinely refuse to accept such notes, while people require loose change and fresh notes for regular use.

This business of notes is livelihood for hundreds in Old Delhi, with vendors offering convenience to customers by charging a fee of up to 20 percent to replace damaged banknotes. A mildly damaged 500 rupee note, for instance, can be exchanged for 480 rupees, while a bundle of crisp, new 10 rupee notes valued at 1,000 rupees is priced at 1,050 rupees.

via India Insight.

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