Demonetization of 500 and 1000 Rupees Notes.. Tip of the iceberg??

Demonetization of 500, 1000 notes seems just the tip of the iceberg…. What more should we expect in coming months….

Demonetization of 500 and 1000 Rupees notes is being hailed by many as way to bring out a lot of black money. True!!  It has created ripples in Black economy.  It has created hurdles by suddenly removing 86% of currency and exchanging/reintroducing currency at slow pace which seems intentional. Demonetizing may just unearth black money in transit. But this is not the end. Some currency pipelines have been disturbed which will be repaired soon by operators in Black economy.

But it seems to be just beginning. Let’s remember that not having PAN may not be excuse now. Aadhaar has now 98% (More than 1 billion) coverage among Indian Adults. The Government seems to be taking up many small steps which may take people by surprise in coming months.   What after this demonetization?? What about sources and sinks of Black money?

 It appears from activities of RBI and Finance Ministry that Government may soon target sources and sinks of black money generation – Black component in Real Estate Transactions, investment in Land and Gold and expenditure in conspicuous consumption. Government may also provide disincentive to cash payments and promote electronic payments by providing rebates…

 If signals are right then we should expect tightening screws on Real Estate, Bullion, Jewellery and cash payments in high value transactions…. We may expect following steps in more or less degrees…. This may be a wish list for anyone who does not want interaction with black economy. Let us be clear that Black economy is not separate from formal economy.  Black and white mixes a lot and many a times black economy is mainstream economy and formal is really parallel economy. 

So think what can be effects if some or all these are enforced-

Ban on cash transactions above certain limit and in certain transactions:

• No cash Transaction above   `1 lakh for any transaction.
•  Keeping cash above `10 lakh may be made illegal. It may be punishable offence with 100% cash confiscation.
•  No purchase of Gold/Jewellery/electronics/Automobiles/Real Estate Assets above `20,000 in cash.
•  No payments to Hotels/Tour operators/airlines above `20,000 in cash.  
•  No donation to political parties in cash.

Support Electronic and Digital Payment Solutions. Make them cheaper than cash payments:

• Removal of MDR (Merchant Discount Rates) on all Credit/debit cards/internet banking/mobile wallet channels. Instead give 2% discount on all payments made through electronic/ digital channels e.g. Internet banking/ credit card /debit card/ mobile wallets. This may be given to merchant as well as purchases divided equally.
•  Impose 5% extra duty on cash payment while purchasing any electronics/ automobiles/ Bullion/ Jewellery (including Platinum, diamond, and silver) or making payment on any 3 star and above hotel.
• It will ensure that those who can pay electronically will insist on paying in non-cash mode. Trader will also find accepting cash payment less profitable.

Real Estate/Transaction in Properties: certain Restrictions

•  Make all power of Attorney deeds invalid. Mostly these are medium of Benami property or mode of transfer for non-transferable properties.
•  Quote PAN and Aadhaar Number for all Real Estate transactions.  Even in case of Firms/Companies/non-human juristic entities one may have to quote PAN of such entity and Aadhaar of person executing/executant of the deed.
• No payment in cash except for stamp duty. Photocopy of bank transaction evidence to be submitted along with deed for registration.
•  Simple Registration of all Rent/ Lease Agreements.  Reduce Stamp Duty on such agreements to encourage compliance and make it mandatory. Heavy penalty of 200% of circle rate in case of non-registration on owner/landlord/lessor and 100% on lessee.

Jewellery/ Gold and other precious metals

•   Uniform registration and sale counters /formats may be made mandatory for all Jewellers. 
•  All sale and purchase of gold reporting may be mandatory and close Income tax scanner may be put on them.
•  Quote Aadhaar Number for all Gold and Jewelry Purchases
• Government may ask All purchasers to declare their existing gold assets.

Bank Reforms/Additions to Income Tax Return (ITR)

• All non-KYC Bank accounts having deposits of more than  `1 lakh may be made “no-debit” until PAN Number/Aadhaar is registered.
•  Form 60 has been in practice for long. Now PAN/Aadhaar may be made mandatory of all         
• Ask for Some Asset details (Land/Gold) and Bank locker details in all  ITRs.
•  Bank Accounts and ITR Already connected. Providing info on Bank lockers may made compulsory.

Is it goodbye to first come first serve policy...

Is it time to start auctioning cinema tickets, railway tickets, match tickets and other such things when demand exceeds supply and consequently there is black marketing. The events unfolded after 2G spectrum allotment may indicate that..

 Lets first understand, why there is black marketing. Blackmarketing is because market value is more than fixed price and demand exceeds supply. This is exactly what happens in case blockbuster movies. Same is scenario in case of alleged misuse of tatkal tickets by some. same thing we observed in case of match tickets of final and semifinal in last cricket world cup.

 So should we abandon first come first serve policy in such cases and necessarily resort to auction? Particularly so if the proceeds of sale are going in government coffers? Logic would be that auction tatkal railway ticket will bring more money to govt coffers.. I am not offering any solution but just giveing food for thought.. What should be strategy in such cases?

Phishing attempt on yatra.com website

I was booking flight tickets on this Sunday morning. It was around 9:45. After selecting the flight I moved towards payment gateway. The payment server could not respond in proper manner and connection dropped.

Then a  phone call came as surprise to me from +911243953200. The person claiming to be representative of yatra.com asked me if there was some problem in making payments. He had all the details of passenger. He told me that there was some problem with payment server and they were sorting it out. I asked when this problem will get resolved and told him that i will get reservation done after that.The person responsible tried talk to me 3-4 times. there was missed call on my phone more than 10 times. He insisted to me that I should login to alternate site and make payment there. the site name was similar to yatra but not same. I got suspicious and asked him his name. On this he hanged up the phone. I tried to call back to confirm my doubt but telephone says "dialled number does not exist.." .

I think some phising was going one with support of some employee of yatra.com. The company should look into such incident and identify the culprit. I have submitted this story to yatra.com complaints. Hope to hear from them.

Again IRCTC dumps passengers..

Passenger are again facing problems in getting tatkal tickets from IRCTC website. when you open the website in the morning at 8:00 o'clock, this is what you see is this ..

https://docs.google.com/leaf?id=0ByfuIMIsKbv2OTBmYThlNWEtOGI0Zi00NjcxLWExNzAtZmEyN2U3NjJiNTU4&hl=en

So now customers ca't get their tickets booked because of maintenence schedule which should have completed long back.. moreover IRCTC is so confident that it even edvises customers to clean their cookies etc if they see this after due time..

I hope booking agents also see the same screen and not only direct users.

--kuldip

Cold wave Continues

Just few days back there was summit meeting on climate change. The whole point has been emphasis on global warming. The cold wave continuing in north India is something that is unprecedented in last many years. Almost similar cold weather has left life out of gear in many countries in north hemisphere.

The question really is whether this counter intuitive phenomena is beginning of a cold age or a effect of same global warming? I think this year this will be discussion point among weather professionals. Let's see what follows...

Are we fuzzy

" There are 10 type of people in the world. Those who understand binary and those who don't."

But you dont need to be genius to understand that life may not be binary... it is rather fuzzy. we
are never dealing with black and white, good or bad , genius or stupid, this or that..... we are always dealing with spectrum of choices..categorization is invention of human mind which is itself fuzzy... So where does it lead to.... It leads to shades of grey insted of black and white...

Aha... grey!!!! that is the philosophy of life... the uncertainty...

the real import of the hypothesis is we can't have prepared solutions, prepared reactions to situations.. We have to decide case by case... every situation, every person, every thing is different from other. Situations may have commonality but they are never the same.