Scrapping Rs500, Rs1000 notes a costly idea…

Scrapping Rs500 and Rs1000 notes a costly idea but it will born a new economy in India.A big-bang reform of black money in India.

Immediate Impact: Heavy Deflation

Initially there will be heavy deflation as people who have earned money through illegal means such as smuggling, corruption would be afraid to declare the money as they might be prosecuted by Govt/Income Tax Dept on the legitimacy of their income.
This will reduce the total currency circulation in the economy – leading to deflation. Deflation increases the value of money that we have because the total money supply goes down but the commodities and things available in the market have not gone down.Gold prices, stocks & commodities will drop.

This will also lead to Inflation (not overnight)

There will be a lot of people who have a lot of cash, legally earned, which they will deposit it in the bank.
Now the bank with more deposits can do more lending.
Credit (loans) will become easier and interest rates may come down. More loans given out increases broad money supply and creates inflation. But this will happen slowly, not over-night.
Deflation and Inflation will balance out each other in the future.

Some of the benefits of this movie are: (Pros)

  • It will help the government to fight Black money, corruption, terrorism and counterfeit currency with one single decision.
  • Arms smuggling, espionage and terrorist related activities will be choked due to lack of funding.
  • Counterfeit currencies are being used for financing terrorism which is being run by the enemy in India. Now Govt has taken a bold move which enables them to fight counterfeit currency/terrorist funding activities.
  • With the new limits on ATM withdrawals being restricted to Rs 2,000 per day, withdrawals from bank accounts limited to Rs 10,000 a day and Rs 20,000 a week, it will drive the card payments across the country (In simpler words card transactions will slowly replace the cash transactions in daily activities).
  • It will be easy for the Government to track the money being exchanged as exchange can only be done by producing a valid government identity cards like PAN, Aadhaar and Election Card from 10 to 24 November with a daily limit of Rs 4000. There is no limit on the amount as long as it is legal.
  • This decision will help institutionalize the real estate sector bringing more transparency in the Indian real estate industry. This step would give the Indian real estate sector more credibility making it more attractive to the foreign as well as domestic investors.
  • Housing prices could witness downward pressure, helping revive demand in the sluggish housing segment (this will give much needed bloodline to the sector)
  • It will help the common man by putting an end to the artificial increase in Real Estate, Higher Education and Healthcare transactions bringing them within the reach of the common man.

Cons

  • Inconvenience to common people who will start running to the nearby bank to exchange the 500 and 1000 currency notes.
  • Cost of replacing the 500 and 1000 Rs notes. If all this additional money (a spectacular Rs.6.666 trillion) had to be printed using Rs.100 notes, it would cost RBI about Rs.11,900 crore, which is more than a four-fold increase. This is without taking into consideration the increased costs of operating ATMs (since they would need to be refilled more often), and of handling money in general.
  • Very difficult for more than half the population who are not well versed with the card transactions.
  • This move deeply impacts the working sections of society: drivers, maids, cooks, electricians, plumbers. Anybody who provides services in the informal sector and depends on monthly or bi-monthly cash payments.
  • How do you expect a chai wallah to leave his business and stand in a queue to deposit these notes in bank?
  • What will happen to the common man who finds out that the note he is having is a fake one? How is the Govt going to handle such situations?
  • The small businesses will be affected at least in the shorter run.
  • Jan Dhan scheme, UPI/digital payment stack and payment banks are still in the nascent stage. It will be a long time before rural India moves to completely cashless transactions. In the short-term, people in rural India who have a significant amount of Rs 500 and Rs 1000 notes, but no official form of identification will have a tough time in exchanging their notes.
  • The big fish will be left out whose black money is in the form of foreign currency, gold and stashed away in tax havens.

But the Pros which are in the long term interest of the country comfortably outweigh the cons.

 

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The Pollution That Kills Delhi…

Pollution in Delhi is a perpetual problem which need to be looked upon as a serious issue not only by the Government but also by the citizens of the city.
  • One of the easiest ways is that there should be an efficient involvement of Resident Welfare Associations in various localities in collection, segregation of garbage from houses and the societies.
  • Citizens can take steps to covert the garbage into compost in their localities.
  • More and more trees must be planted in every locality.
  • Every individual should keep a proper check on the pollution level of their vehicles.
  • Making more use of CNG.
  • One of the best ways to control pollution is to manage wastes of all types in a proper manner.
  • Each and every citizen should abide by the 3Rs: Recycle, Reuse, Reduce.
  • More and more people should use bus and metro instead of cars and scooters, as they can carry a lot more people in one journey. Car pool is also a good option.
  • Controlling the use of energy and making use of electricity in an efficient manner.
  • One can also reduce water pollution by reducing the use of chemicals, cleaning agents, pesticides, herbicides, fertilizers etc.

It is the duty of every citizen to think in a broader perspective to control pollution. We really don’t want our future generations to live in an unhealthy environment in Delhi. We really don’t want our children or our elders to get into incessant coughing due to pollution. Like we say charity begins at home, I take a pledge to do what I can for my environment and protect it to the best I can. If each one of us takes a pledge to do our bit for our environment, I am sure Delhi will be a better place to live in. Even a small step counts…

”RICH DAD POOR DAD” A Truth behind “Millionaire & Struggler” – Robert T. Kiyosaki

Having two dads offered me the choice of contrasting points of view: one of a rich man and one of a poor man.

My two dads had opposing attitudes and that affected the way they thought. One dad thought that the rich should pay more in taxes to take care of those less fortunate. The other said, “Taxes punish those who produce and reward those who don’t produce.”

One dad recommended, “Study hard so you can find a good company to work for.” The other recommended, “Study hard so you can find a good company to buy.” One dad said, “The reason I’m not rich is because I have you kids.” The other said, “The reason I must be rich is because I have you kids.” One encouraged talking about money and business at the dinner table, while the other forbade the subject of money to be discussed over a meal. One said, “When it comes to money, play it safe. Don’t take risks.” The other said, “Learn to manage risk.” One believed, “Our home is our largest investment and our greatest asset.” The other believed, “My house is a liability, and if your house is your largest investment, you’re in trouble.” Both dads paid their bills on time, yet one paid his bills first while the other paid his bills last. One dad believed in a company or the government taking care of you and your needs. He was always concerned about pay raises, retirement plans, medical benefits, sick leave, vacation days, and other perks. He was impressed with two of his uncles who joined the military and earned a retirement-and-entitlement package for life after twenty years of active service. He loved the idea of medical benefits and PX privileges the military provided its retirees. He also loved the tenure system available through the university. The idea of job protection for life and job benefits seemed more important, at times, than the job. He would often say, “I’ve worked hard for the government, and I’m entitled to these benefits.” The other believed in total financial self-reliance. He spoke out against the entitlement mentality and how it created weak and financially needy people. He was emphatic about being financially competent. One dad struggled to save a few dollars. The other created investments. One dad taught me how to write an impressive resumé so I could find a good job. The other taught me how to write strong business and financial plans so I could create jobs……#conti.#books

Greece’s debt crisis make a new twist in R. Rajan world Economic slowdown prediction…

Indian Financial Guru RBI chief had been the ring the bells about the world economy facing the Great Depression. After a day Greece economy clashes over the financial system. Financial market,Banks has been shutdown for week , people has restricted ATM withdrawal at 60 euro.

Its door bell for economic slowdown; if it is then its a new twist in Raghuram Rajan prediction about ‘world economy going to face crisis as 1930. Rajan, who himself has been IMF’s Chief Economist and is among the few to have rightly predicted the financial crisis of 2007, has triggered a debate among policymakers and economists with his warning against central banks globally being pushed into “competitive monetary policy easing”.

Apart from the chief debate if this prediction make again a black spot on global economy then; how does this Greece crisis affect the global financial system?And in the meantime, if another country of euro-zone comes under crisis then it’ll have off the euro-zone economy.

However, Analysis is on prediction things can be change investor can be stay or can be move; no one can challenge what will happen tomorrow.

Naked Truth of Education System – Behind the corner of Politics

Today is the age of innovation and specialisation. And with this fast moving techno-age, the Indian educational system seems to go nowhere. Though we are aware about the progressive minds of Indian students all over the world, we tend to overlook the fact that most of them find abode abroad in USA or Australia. Let us focus on some stark realities.



Indian education is full of innumerable pages of obsolete, outdated theory with no innovation or any practical work. The eagerly awaited new textbooks have nothing more than flashier cover pages. Moreover no importance is given to co-curricular activities. All bored students who consider studies as an interminable disease and teachers who are victims of disinterest. This also increases suicides among students.It is high time educationists start moving with the times. They need to realize that they can no longer continue to burden the youth with unimaginable pressure and simultaneously provide miniscule encouragement to pursue their creativity. An entirely new approach has to be adopted which focuses upon innovation and practical aspects of education. And the sooner this reform is brought, the better it is for us……. #rbg

Continue reading Naked Truth of Education System – Behind the corner of Politics

Globalization-A Reinforcement of Indian Economy

The advent of globalization as a result of liberalization and privatization has both positive and negative on our economy. while one group of people argue that globalization provides greater opportunities , opens up new markets,promotes the use of better technology and increase the efficiency of production, another group of people feel it does not protect the domestic industries particularly in developing nation. From India’s perspective, globalization has improved our condition of living and opened up employment in fields like entertainment ,IT,telecommunication, hospitality and e-commerce.

Now that India is in the process of restructuring her economy, with aspirations of elevating herself from her present desolate position in the world, the need to speed up her economic development is even more imperative. And having witnessed the positive role that Foreign Direct Investment (FDI) has played in the rapid economic growth of most of the Southeast Asian countries and most notably China, India has embarked on an ambitious plan to emulate the successes of her neighbors to the east and is trying to sell herself as a safe and profitable destination for FDI.

This era of reforms has also ushered in a remarkable change in the Indian mindset, as it deviates from the traditional values held since Independence in 1947, such as self reliance and socialistic policies of economic development, which mainly due to the inward looking restrictive form of governance, resulted in the isolation, overall backwardness and inefficiency of the economy, amongst a host of other problems. This, despite the fact that India has always had the potential to be on the fast track to prosperity….