FRDI Bill Suggests “Bail-In” no “Bail-Out”

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I think most of us know what is Bail-Out during post-2008 economic this term bail-out was used more often in discussions and news which clearly was intended to recapitalise the banks and financial institutions to carry out its business of lending and advances as usual. But we as Indians should need to get familiar with the term “bail-in”. Also don’t be surprised if tomorrow once the financial resolution and deposit insurance bill get passed in the coming winter session of parliament, then the certain clauses in the bill refers to a situation where you and I would be sharing a percentage of hard earned money to solve the NPA crisis. We all know that several of our public sector banks have been facing very severe NPA crisis because of their percentage of stressed assets has gone beyond control. So to overcome the situation our hard earned savings which are lying in the bank in form of deposits might be used to mitigate the losses the banks had made when they lend a huge sum of money to big corporates in India.
Unlike other economies in the world where people barely keep their savings in the form of deposits in banks because it fetched very less rate of interest for them, so they used to park the money in other asset classes. But the scenario in India is entirely the opposite, nearly 70% of the deposits in public sector banks are being contributed by the household savings of middle-class population. So imagine a scenario where we have to forgo a certain percentage of our deposits to support the bank to get out of the woods. Then what would be the guarantee that our savings in the banks will safe or in case tomorrow if walks in to your bank and asks the bank to liquidate the deposit and pay the money back to you, don’t be surprised if you get a reply from the official that you are eligible to get a certain percentage back, rest we will give it you after some time. If that happens I am sure we all will be crestfallen. The bill says
“The Corporation shall, in consultation with the appropriate regulator, specify the total amount payable by the Corporation with respect to any one depositor, as to his deposit insured under this Act, in the same capacity and in the same right”.

Let’s take a hypothetical situation, a scenario in which is a bank is facing liquidation an amount up to 1lakh which includes interest has been guaranteed under the deposit insurance scheme. But so far we never faced such situations because RBI as a regulator intervened proactively to help the problematic bank to get merged with a larger bank by transferring all its existing liabilities and assets to the bigger bank, hence helped by saving all retail investors not to lose their money. But if the new bill after all the discussions and deliberation comes to a reality then stressed banks control will completely come under the prerogative of” resolution corporation” In that case, it is not sure how much we as a depositor have to sacrifice on the losses bank has incurred over a period of time.
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In this regard, the bill says the following:
“…the Corporation may, in consultation with the appropriate regulator, if it is satisfied that it is necessary to bail-in a specified service provider to absorb the losses incurred, or reasonably expected to be incurred, by the specified service provider and to provide a measure of capital so as to enable it to carry on business for a reasonable period and maintain market confidence, take an action under this section by a bail-in instrument or a scheme to be made under section 48…..”

So let’s wait till the final contents of the bill come out in the open till then we all have to wait by keeping our fingers crossed.




downloadAlthough there have been many discussions happening around the globe on the future of cryptocurrency and opinions are in different hue and nature , many of them say that it is going to be the future how the world is going to transact or some other says cryptocurrencies are just a bubble which is not going to last too long. But the reality is that value of this decentralized currency has been going up for quite some time. Majority of the central banker’s has not accepted this form of the value of currency stored in digital form, however, the demand for cryptocurrencies has been going up day by day. The question largely would be what will be the implications if across the world people start using this form digital currency more often than usual. Yes if that happens world would witness a new form transactions where no government or central bank having any control or right on the transactions, You can transact with anyone from the across the globe immediately without any hassles.

Demystifying Cryptocurrency

At present, if we want to buy something through online we initiate transactions from our end, the bank or the credit act as an intermediary between the two ends. These intermediaries like bank or card company charge you with certain transaction cost as well as helps them track our transactions and our buying behaviour because everything transactions pass through a central ledger maintained by the bank where all the transactions will be captured. So if you want to keep the transactions directly between the buyer and end-user cryptocurrencies is the answer where nobody can track the transactions and its information. So in 2008, a new innovative idea was born where no banks or card companies could maintain a central ledger, But in the case of cryptocurrency instead of the central ledger, it becomes decentralized where real-time ledgers were created at every point of transactions called blockchain.

How it benefits

 This helps to create direct transactions without any intermediary.
 No restrictions for transactions across the national borders.
 Future wealth could be stored in cryptocurrencies without any theft and fraud
 No government or central banks have the control to freeze the account as they are able to do now.
 Unlike the currencies which are at present issued by central banks, Bitcoins are not issued by central banks.

Prominent cryptocurrencies available today

1) Bitcoin
2) Litecoin(LTC)
3) Ethereum(ETH)
4) Zcash(ZEC)
5) DASH( Previously known as Darkcoin)
6) Ripple(XRP)
7) Monero(XMR)

Still among the pack Bitcoin has been the most favourite among the users and followed by Ethereum and Ripple which are mostly used for enterprise solutions. But how these new digital currencies are going to change the way we transact now remains to be seen. In our country, RBI and Govt have not given green signal to accept the digital currency but constituted a committee to study its prospects and who knows central bank itself would come out with its own form of cryptocurrency. Let’s keep our fingers crossed and see what happens, but one thing is sure such technologies are going to disrupt the way at least the coming generations are going to transact in the future.


Development and its false notions.

We as the citizens of this country has been aspiring for development, Everybody wants to see our country’s progress because right for a decent living with minimum amenities in place to satisfy our needs is democratic rights of each and every citizen of this country. We vote candidates from different political parties based on plank called “Development”. Have these representatives of the people do justice to their promise to the people, I think this question lingers large on everybody’s mind. The most recent stampede in Mumbai on the railway overbridge proves a point beyond doubt that Govt priorities changes once they are elected to power, they consciously forget their responsibilities towards common people of this country because either they have an agenda to pursue which has been far away from the realities on the ground or a misplaced notion for development . However, they pursue policies to favour the rich and corporates, help them gain maximum profits for the corporates out of it. In today’s environment, it has been increasingly evident that the Govt policy measures are not in sync with the reality, But politicians have consciously tried to pass the message to the larger audience that they are trying to build a new India. what is this new India means to common people, Is new India, govt talking about leave farmers to die because of not able to pay their debts, or children die out for not receiving the oxygen on time , or scores of people are left to die while standing in the queue to withdraw their savings from the bank,But frankly speaking all these campaigns by those in power is nothing but an effort to keep us living in fool’s paradise with hope that sometime someday something better would happen . Now, let’s take the incident happened in Mumbai around 25 valuable lives had been lost in the stampede, it is well known and many times it has been brought to their notice that the railway overbridge is 120 years old with the narrow passage which inadequate to handle the volume of passengers who commutes daily. But on the other hand, we have seen PM launching a bullet train project from Surat to Mumbai with a project cost 10,000 crores. But left to lurch in perennial neglect Do you think it is because of the misplaced priorities and opportunity for photo shots to be in the realm of public life as” Vikash purush “. I think beyond that govt’s has scant regard for the valuable lives of the common people. So it is quite natural to think that launching a bullet train project attracts more eyeballs, improve the optics than the repairing, improving the existing infrastructure of the railways. The major source of income to govt comes from the taxpayers money through direct and indirect taxes, Out of that major source of revenue comes from the indirect tax sources which you and I pay while purchasing our grocery or filling petrol in our vehicles , but the moot question is where do they spend the money collected from us ? Had they been spending the resources wisely frequent occurrence of rail accidents could have been avoided.

Misplaced priorities.

In the last several decades and increasingly so in the last three years, the optics of development for this govt has been through series of announcements of schemes, But very little budget or money has been allocated to improve the situation. Take in the case of rural distress and farmers problem, in the last three years we have not seen any concrete or well thought out plans to address the problem faced by the farmers, Now we have started debating whether the demonetization has delivered its objective , still many argue that the long-term benefits would overweigh the short-term problems. How is it possible when Govt allowed the daily wage workers, farmers to starve and die of poverty. When you have global oil prices at all time low, how can they still allow it to be costlier in India without passing the benefits to the common people? These issues need immediate address rather than ministers after minister trying to justify the move by showing very less importance to issues affecting the common man on the streets.

Optics matter more than the reality.

A responsible government and its administration should be spending the time to address the issues faced by the masses and how they could solve the issues faced by the public at large. In the case of demonisation as the biggest administrative act by the govt has failed miserably, because the reports are out in the open which states more than 90% of the money in circulation came back to the banks. So the purpose of the demo has failed completely. One shock after the other flawed implementation of GST has destroyed the backbone of the economy further, So serious of shocks had already put the ailing patient in ICU, which takes for the patient to come out of the danger. But the optics created by Modi government being that they are sincere in their efforts to attack the black money and GST has been hailed as the biggest reform since independence. If Govt has had any seriousness in curtailing the black money in circulation they should have acted with resilience in bringing the black money stashed abroad, And also should have imposed more taxes on the elites, If they had done any of these it would have signalled some credence to their sincerity in curbing the black money. . Job losses have hit economy badly which really pulled GDP growth down, overall distress in rural economy has taken the situation to such a low, perhaps it takes time to recover.

Inclusive development

You cannot have changed priorities once you get into power Because elected representatives carry the hopes of millions of people who daily fight to survive, lead a life of dignity. So any development for that matter should be inclusive in nature which takes care of the basic needs of the common masses. Take for instances the agriculture’s contribution towards GDP has been declining steadily for couple of decades , Govt, after govt promised to take care of the concerns faced by the farmers, But little has been done to improve the situation, like this many sectors be it education or healthcare which needs a lot of attention and care to improve it. So a real development is nothing but taking everyone together, For the last 3years we have seen hue and cry happening over cow vigilantism and nationalism, Do such priorities of the Govt do any good for the
80% of the population?

Cost of Bullet train

The project cost is expected to be Rs.110,000 crore ie is which works out to be Rs.217crore per km. In 2016 Indian railways reported 186 deaths which go up to 325 deaths, why Modi goes for this expensive project when the entire railway infrastructure meddles with problems of long-term neglect. so it has been the classic case of misplaced priority.

Source:  Frontline October 13, 2017.

The Futile exercise called Demonetization.



When RBI published its annual report on August 2017, the writing on the wall met its true fate. The historic move by the Modi government to demonetize high-value currency notes was termed by many as a right move in the best interest of the nation, But it turned out to be historic blunder which has not yielded any significant results as expected. Every body has been waiting for the central bank to publish its report, Perhaps were hopeful that it would at least meet some of its objectives. But the finally the report from RBI showed that demonization exercise was completely ill sought and unwarranted. The Initial objectives behind demonetization were to clean the economy from counterfeit notes, black money, terrorism funding. Has our government stated objectives have been achieved? I think in the light of the RBI report the answer is an emphatic no.
However, BJP, as a national party has benefited heavily due to demonetization in the political sense, in contrast to the expected economic sense. In the hindsight the demonetization has been complete dampener for the economy especially in the informal economy, no surge in job creations but only aggravated the situation further, the unaccounted money held in cash is very minimal, so unearthing black money through this activity has been minimal , Terrorism and its funding has not seen any decline, the recent skirmishes across the border has only increased.

The shift in goal posts.

Since the report by RBI came out in the public domain, comments made by FM Mr Arun Jaitley is nothing but a laughing stock. Our honourable FM told that nobody understood the objectives of demonetization better than him, in his statement the foremost objectives expected from demonetization exercise is to convert cashless economy to digital economy. But however, the report suggests that Govt has fallen short of achieving even that also.

Highlights of the RBI report

1)99% scrapped note are back into the banking system ie means almost all the currency which was in circulation came back into the banks
2) Total number of fake 500 rupee (old series) and 1,000 rupee notes detected between April 2016 and March 2017 was 573,891
3) Withdrawn notes to the tune of 24.02billion, But in proportion to the identified counterfeit notes is close 0%.
4) Even in the previous year with out demonetization, the number of counterfeit notes identified was stood at 4404,794.

After effects  of demonetization

Even my personal experience with the many of the small scale shop owners during proved that their business activity has been steadily declining, even their average sales in provision stores & hard ware shops has been witnessing a steady decline in sales around 30 to 40% compared to pre demonetization months. The 80% cash economy in the upcountry market has been hit massively. more over people are worried pump money to start new ventures, even they had stopped taking more stocks for their existing business. Profit margins have been hit heavily, that is evident from their delayed EMI payments.
The most critically affected are farmers and construction workers, the move to demonetize the currencies of 500 & 1000 proved like adding insult on to the injury especially the crisis faced by farmers across the country. I think BJP as a party has seen a mercurial increase in their coffers with over flow of contributions into their party funds. I think more than any Indian, the benefit of demonisation has been completely utilised effectively by the present ruling party. The Govt of the day should take accountability for the failure of demonetization, Instead of that govt is busy shifting their goal posts very frequently to cover up their failure.
A lot of concerns has been raised on the performance of the economy, especially the GDP is below the expectation , Job losses are heading north, Low private investments, Govt’s start-up, Make in India plans never took off as expected barring few, perhaps we need to acknowledge the govt going gung ho for making tall claims, successfully running campaigns in social media, public image.

Media’S act as a lip service of the Govt

The Modi Govt could have done many things better as they have a strong majority in the centre, instead of that Modi dispensation has been busy whipping up passions on nationalism & patriotism, Cow vigilantism & completely overthrowing the democratic credentials of our nation. People have voted for a strong governance, but in the last 3 years, performance has fallen short of expectations. I think we need to put the blame squarely on the media also.The role of media houses owned by major corporates are doing the Job of mere Lip service, acting as a PR machinery of the Govt, Media’s role in a democracy is to constantly act as a countervailing force, how ever in the last 3years media has been dancing to the tune of the Govt.

Remonetization still a distant dream?


PM’s 50 days timeframe  is over  which had  started on  November 8th  and ended on December 31st midnight , when the nation watched and listened carefully his public  address that 500 and 1000 rs  currency was no more a legal tender, People waited and clapped both their hands that  demonetizing  high valued currency was a good move to address the plaguing issues like  black money, counterfeit notes, and terrorism funding . Yes well said  Mr. PM, We all believed that by all accounts those menaces should be addressed hands down, the action by Modi, in fact, was a step in right direction.  But people were expecting the announcement from PM on the December 31st, 2016 that PM will address the nation with actual facts and declare the success rate in countering the issues for which people have waited patiently in queues n spite of the difficulties by keeping the national interest in mind. Now the deadline announced by PM has passed, still, the cash crunch is continuing unabated with no respite on the immediate horizon. But carefully worded PM minced no words on the success of his massive reform. Instead as usual at his best, he eloquently announced several sops to divert the attention from the core issue. The last 50 days more than 100 lives have been lost while standing in the queue to draw and exchange money which is legitimate right necessarily to buy things like medicine, groceries and pay their rents. But no word of assurance from PM when the crisis is going to end, and how far they have to wait in long queues to get to their cash lying in their respective bank accounts. People have patiently digested the change in rules which roughly got changed more than 15 times in last 50 days.

Carefully catapulted narrative to shift the attention to digital transactions

The war cry to address the black money is slowly pushed to backburner , and new found enthusiasm to promote the cashless transactions had started finding more traction , the most visible attractions is the launch of Bhim App which is linked to adhaar, everybody in govt and others who supports Modi started favouring the use of digital transactions as the best possible remedy to tide over the crisis which was self-inflicted by the elected govt  who is supposed to take care of the people’s wellbeing . Now the government being tactical is puts the burden of its own decision back to the same people who had voted them to power.The irrational responses from the ministers without understanding the hardships of the informal sector is the biggest despondency shown by the ruling government.I think those rich and elites are watching the hardships of the common man on the streets laughing at the plight of the poorest of the poor.  In the last 50days, we have seen how bad and severe was the impact of demonization on the informal sector. The livelihood of the casual laborers, small farmers who depend on cash to manage their daily household expenses was left in the lurch, Govt is busy vouching for cashless transactions through mobile wallets and electronic banking, a complete insensitive approach to common man’s sufferings.

 Push for a digital  economy with no logic

I am not qualified economist nor having any deep understanding about the undercurrents of our macroeconomic system, But as laymen, if I apply simple and straight forward logic of how a normal consumption happens in the economy, especially in the rural sector, one should really find the economic logic of demonetization falls flat. The cyclic effect of such a large disruptions even if for a shorter duration has the potential to create large ripple effects which might pull down the economy to a state of decline. Like adding woes to the injury, this massive reform is going to severely hemorrhage the country’s economy in the months to come.  Last week I was having a word with one of my friend who is a wealth manager in one of the leading financial conglomerate  , he is of the opinion  that economy would pick up in the long term and what telling effect it had on the economy takes more time to judge, I asked him how his wealthy customers are responding to the demonetization ,he laughed  and said my customers don’t keep anything in cash their money is held in other various asset classes other than cash.  He also admitted that  a lot of consumption has been displaced because of this move, but somehow  due to the relaxation in taxable income, salaried class, and middle-income groups would be left with more disposable income than usual which will fuel more  consumption, in the  hindsight spending will pick up, I asked him about the state of informal economy  , he has no answer to that specific question . I think I felt the same when PM or FM speaks to media on demonetization.   It remembered me the act of robin hood who stole from the wealthy and gave to poor, But here PM  sucked  in what little is left in the hands of the poor and passed  the benefits to mobile and E-wallet companies, certainly provided on a platter   a real harvesting time for the many of the startup wallet companies. Last but not the least if the govt is so serious about curbing black money, the first step should have been on  addressing the issue of political funding  manner of spending it during elections, But no serious attempt to address the donations to political parties, but if they had shown some spine in  addressing the  naked truth with seriousness then the whole demonetization drive  would have created some  semblance of credibility.


Verdict of demonetisation is out in the open



source :Indian express

Certainly, by far in the history of governance in India, the move to demonetize currencies of the higher denomination by Modi govt is to be seen as a major disruption to the economy which is already reeling under a lot of problems. Economist and political pundits across the spectrum have hailed it as Short term pain with long term gain, But nobody knows how long it takes to set the business as usual when demand and unemployment rates in the economy are already seeing severe stress and strain. It was thought that bitter pill of demonization would be easier to swallow and things would get back to normalcy after some time but now it is almost sure that the self-infused crisis by the govt take more months to get  back to normalcy , But the deadline sought by Modi to sort out things in order is already nearing its end.  The pain  and   hardship is not  yet over , The long serpentine queues in front of the ATMS and banks are  continuing with no respite , People are finding it difficult to withdraw their legitimate earnings  lying in their account , the informal sector is struggling to get on to their  feet to cope with the sudden and unexpected whammy imposed by Modi on people.

Our PM was even mentioned in a  speech on a lighter note mentioning the use of POS machines by beggars on the street while accepting alms, his pipe dream of converting the most entrenched cash as a medium of transactions in India to cashless India remains a gargantuan task with no immediate resolution in place.

Modi’s pipe dream

I think we should give a big credit to our PM for dreaming big by snatching the lively hood of people in rural sectors like farmers, daily workers, and small and medium establishments whose business survives on cash transactions. Now, November 8 the Modi had decided to change the predicament of common people by introducing such a huge reform of chasing black money by bringing them into the formal economy. But the cost of such a move is huge and enormous than expected, by all means, once affected it takes longer to time to kick off the demand, naturally, corollary is that 2% dip in GDP is almost on the cards.

On one side we hear reports of lives lost while waiting in long ques to withdraw money, which was earned legitimately,  On other side reports are coming from several  parts of the country of the reported seizure of money in new currencies. Banks are denying the people their rights to withdraw the money lying in their account, but influential people are still enjoying their days without much sweat. The whole exercise is completely taken without much preparations, which brought huge distress in the rural sector, especially to farmers.  I think PM Modi became too much obsessed with his image building  ex-cerise as powerful PM in the making after Indira Gandhi  , so PM  deliberately overlooked   the likely  implications on common people of this country , rather  PM’s   belief  is that this move would better his image as  a strong leader, So deliberate attempt from Govt,  public machinery to make everyone  believe that this one stroke of brilliance by Modi would make our country   free from  black money,

Modi jumped the Gun

I think Modi jumped the gun to demonetize currencies without much thought and consultation, Now it is like a catch 22 situation which even those in PM’s  cabinet secretly agree. The move has already made a huge dent in the rural economy which takes more time to recuperate than expected. The rural demand has virtually come to a standstill, transactions are not happening, the supply of money in the system has stopped. Farmers are not able to meet their daily expenses because they are forced to sell their produces at much lower price than what they have spend  on production. The government is of the opinion that that money which has come to banks from informal sector would be used for the greater  good of the nation , So a calibrated effort is doing the rounds to create a narrative to link the move to help the poor in the long run. But center failed to recalibrate the ATMs to welcome the new currency, such is the lack of planning which govt has committed without considering the ill effects of such a move. Suppose  consider a hypothetical situation if all the black money in circulations are in cash this move would have created a telling effect on the  flow of black money ,but when you have real situation in which more than 80% of the black money which is already in circulation are converted and stored in various form  of assets , how can such a move have an impact on the black wealth, which  is a  question needs more answering . The logic of such move never meets the details or this might be another way to show the Modi’s  autocratic style of functioning, future .even putting the most trusted institution like RBI reputations under risk. The people who have initially supported the big move by Modi slowly started to realize the pitfalls committed by the central govt severe cash crunch most of the bankers poses grim picture in front of their customers who are waiting to withdraw their cash. But I  feel this drastic unprepared move certainly a hidden motive of supporting the private mobile wallet companies to ramp up their operations and also helping public sector banks to write off their non-performing assets and recapitalize banks to lend more to the corporates.

Cash to Cashless system

One thing is for sure converting our economy from cash to cashless is a long journey which takes years to put in place, the bleeding common people has to bear more pain than the usual to get everything back to track. As per the statistics  suggest almost the 86% of the cash in transactions has come to bank system since Nov 8  , and interesting part is that only legitimate money which is kept as small savings by farmers and house wife’s came to banking system, but how far the real black money which was the intended motive behind demonetization drive could have helped the economy begs more answers from the Govt . Now the latest amnesty scheme rolled out by the Govt to those who declare their black money with 50% penalty seems to be a desperate attempt to draw some credibility to the failed demonetization drive.  The institutions like RBI and its independence has been completely subverted by the govt through this move. I think RBI has never been consulted, at least before making such move, better preparation would have helped the to lower the common man’s sufferings.

RS 500 crores wedding Splurge.

Amidst all the furor  about  demonization , last week the country has witnessed a big fat wedding of a Mining barons’ daughter Mr. Janardhan reddy, the worth of money spend for    just 48 hours  ceremony  seen him throwing mammoth  500crs which is almost quarter  of a money  earmarked to  a state’s budget for a financial year. The mining baron has shown no bones to spend 500 crores  when the country as whole is seeing serpentine crowds in front of the bank and ATMs for their daily needs . The whole announcement of demonetization exercise is been made a mockery by the rich and powerful . This is the true picture of  a country with  1.2 billion people  who  embodies the stark reality of have and have nots.

When our PM is shedding crocodile tears  by  reiterating his responsibility to poor and needy by  hailing his action of invalidating the legal  tenders as invalid ,  PM Modi claims  that his move to will   root out all black money from  the economy and eventually would  resurrect our  financial system  by curbing all illegal activities  raised out of black money. The whole media is singing   the chorus  to the  lyrics written by our PM. Difficulties faced by the poorest of the poor , small-scale farmers and traders in mandis are mere difficulties which are going to be there for short period  of time.  But the narrative of larger national interest is  getting more traction in the days of heightened nationalism. The reports claim that banks are  flush with funds and inflow of money to  the accounts would help the banks to post stronger CASA growth .  But very few in the government  had conveniently ignored or selective amnesia   has taken hold of their consciousness to  forget where   the  actual source of    black money lies  .  But govt are  more generous in offering more   sops  to corporates  through tax holidays , tax-free business  zones , Participatory notes  investments in capital markets , delayed  reforms in tax policy , allowing wealth to accumulate in tax heavens

Establishment  for wealthier to become more  wealthier

The  process of turning illegitimate to legitimate  wealth  through various routes  was an  open truth which administrators and politicians know  it better ,  they have a very stronger role in facilitating the conversions to happen  in converting this money from unaccounted money to  accounted source  .We elect them through a democratic process which legitimizes  them to take   decisions favoring few and burdening the majority  .  In the world of today and the  kind of  politics which  is played out in the open , what matters more  is the image , than the substance of the actions which is being pursued . The majority of the population  without any reservations has started believing that  demonetization is going to do a great deal of good for the nation. All those rich and elites  are   laughs  in silent seeing   the desperation of the  common people waiting in the  queue for long  hours   with no respite  . they anxiously waiting to secure whatever little they have earned  during their lifetime.

Pseudo nationalism

Govt of the day speaks  like a tuglaq ruler in character  advising the millions of poor and daily laborers  to transact in digital platforms and mobile apps, at least the idea would have sounded good if  half of the rural sector are adequately electrified , connectivity extended.  But govt is least bothered to think of the consequences of the larger section of people who have not seen a mobile , or not even having  bank account , whether they starved to death or struggle to make a living , The agenda of winning some brownie points to gain greater  political mileage is the effective motive behind such decisions.

If the govt is so serious about containing black money , the course of action should start from the tax evaders first, carry out severe surgical strikes against wealth stashed in tax heavens and more importantly  action from  their own house t by openly declare the source of funds received  by them . I am sure no party in India has that guts to  publicly declare their source of  funds.  The major chunk of  black  money which is roughly 6 to 12%  in circulation gets utilized   during  the time of the election .

Our nation   is known to produce millionaires every year  after year the list of the super-rich is going up like a steady curve. We as  a nation is seen behind in  several  social indicators which are even worse than sub-Saharan Africa . How  do  millionaires race to  become trillionaires , or can you just say that it is a mere part of India’s growth story and stable  GDP  growth ? This is the fallacy which  Modi knows well, but  when the ruling dispensation is hand in glows  with  1% of the population who controls 50 % of the wealth , what else can we expect from this act , The looters  and big corporate who enjoys all the power in the system can simply sit and watch the way drama unfolds , plight of the working  class is getting even worse after this move. After for all those who  struggle to have  their both ends meet  has  received another blow to their face , but for few, this  anarchy  is a blessing in disguise .The politics is the real winner who keeps the  majoritarian  fingers crossed.