Hacker News Reader

Comment by matkoniecz | Hacker News Reader

Remind me about https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

> On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes

> Several people were reported to have died from standing in queues for hours to exchange their demonetised banknotes.[180][181][182][183][184][185] Deaths were also attributed to lack of medical help due to refusal of demonetised banknotes by hospitals.[186][187][188]

> The exchange of banknotes was stopped completely on 25 November, although the government had previously stated that the volume of exchange would be increased after that date.

> The push for digital payments was one of the stated intentions of demonetisation.

So if someone missed this 17 days or has not managed to exchange their funds - then they would lost all their cash they were holding using demonetized banknotes.

View on HN

> So if someone missed this 17 days

this sort of shit is what makes a gov't a low trust gov't.

It exacerbates the informal economy - people would not want to pay taxes to fund such a govt, because they don't see that the gov't is running with their interest in mind (despite india being a so called democracy).

It was a poorly thought-out policy.

> people would not want to pay taxes to fund such a govt

that reminds me about another gem:

> The use of demonetised banknotes was allowed for the payment of municipal and local civic body taxes, leading to a jump in their revenue collections.

> It was a poorly thought-out policy

It was robbing people. Poorly thought out policy is an expression for people with good intentions, I just don't believe in that when it comes to the Indian government.

> So if someone missed this 17 days or has not managed to exchange their funds

The first deadline of 17 days was to get rid of the demonetised notes by depositing them with banks.

The logistics of the demonetisation was a total clusterfuck. The banking infrastructure was kept in the dark so they were utterly unprepared to handle the rush. They were provided with zero information and SOPs so they were also totally clueless to handle different situations. To make matters worse the new weren't readily available. So the withdrawals were rationed. 500 and 1000 notes formed the bulk of notes in supply, something like 90% of notes in circulation. And this was at a time when digital payments weren't adopted by the masses. Most of the daily wage earners didn't even have a bank account. India is a large country with lots of remote, hard to access places. People were still clinging on to these old currency notes, as their primary savings, to discover that they were useless 2-3 years later. All of these lead to a cascading failures. Imagine removing 90% of circulating blood from a large animal. That's exactly what happened to Indian economy.

I'm sure there's like a dozen PhDs in there for humanities, economics students in there.

Here's a good (but hard to find) video on the topic: https://www.youtube.com/watch?v=qELSFa5NtYc

The speaker has researched on this topic for decades.

They only had 17 days? That's ridiculous; normally they would just stop printing them and have them be taken out of rotation in a natural fashion (e.g. bank deposits, but that assumes cash is eventually deposited and converted to a number in a bank account).

The goal of that campaign was not to change which denominations are in circulation, but rather quite explicitly to confiscate unaccounted-for wealth stored as piles of cash - that's why there were all kinds of quantity limits, and also the time limit to ensure that those who had a lot of such cash could not effectively launder most of it.

In spite of all that, more than 98% of the demonetized bills made it back to the banks.

> They only had 17 days?

Yes. Unless this Wikipedia page is horrifyingly misleading.

But this alone would ensure that I would keep all my funds into something more trustworthy. Even freaking Bitcoin starts to be a sane solution, to say nothing about dollars/euro/gold.

That is how you realize the intent is to oppress senselessly, not just oppress.

For comparison, in Poland the "old" and "new" functioned for 2 years.

After 2 years it was not legal to pay with them but you could still exchange them in national bank...

...for next 14 years

It's just WTF.

Same in India for most cases when taking out old notes in circulation etc

This particular demonitisation was done as a shock move to ostensibly catch corruption, black money etc.

It was lauded and welcome when it was announced, including by yours truly.

It was quickly seen as a poor execution by most except the ardent supporters (which doesn't include me)

I am sure most in the govt would secretly agree it was a bad move.

https://archive.ph/ynouY

> India’s central bank has estimated that 99 per cent of the high denomination banknotes cancelled last year were deposited or exchanged for new currency, dashing government hopes that its contentious demonetisation exercise would wipe out huge amounts of “black money" ... complex money-laundering networks sprang up in the wake of the demonetisation to help wealthy Indians deposit huge volumes of previously undeclared currency without exposing themselves to tax authorities. Such people allegedly sold the old notes, at a discount, to brokers who then dispatched low-income Indians to deposit or exchange them at banks.

people were jumping into conclusions about this event without knowing about this context. it was still a net negative imo, but the way the restrictions existed because of "black money" reasons.

however, if you love the freedom of holding cash the way you want, then this was definitely not a good time.

> The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on the day after the announcement. The move reduced the country's industrial production and its GDP growth rate. It is estimated that 1.5 million jobs were lost.

Wow.

They should have gone back to the drawing board after seeing their announcement lop off a huge chunk of their equity market capitalization.

What has this got to do with TFA?

Both are weird and suspicious and complex financial operations done by Indian government on their citizens.

What is “weird” or “suspicious “ about these? Please be specific, not just parroting something off a news article you’ve read. I’m interested to hear how much you’ve actually understood the motivations for these actions (the ultimate results notwithstanding).

> What is “weird” or “suspicious “ about these?

Lets go with simpler one.

Giving people 17 days to exchange all their cash under penalty of losing all of it is weird, suspicious and stupid. And evil or incompetent or both.

People responsible for that are responsible for massive amount of human tragedy without a good justification (no, good intentions do not count as one).

> Please be specific, not just parroting something off a news article you’ve read

Can you explain how/why this demonetisation would NOT be “weird” or “suspicious“?

Incompetent? Most likely. Again I don’t see any convincing argument for why it’s “weird” or “suspicious” in the usual meaning of those words in the English dictionary. It’s fine to throw out a word salad if that’s your communication style, but don’t be surprised if people ask for specific reasoning for those words.

> Can you explain how/why this demonetisation would NOT be “weird” or “suspicious“?

No that’s not how this debate thing works :)

> No that’s not how this debate thing works :)

If you demand from me to spend time on more detailed explanation and you are unwilling to do the same, then I prefer to spend time on something else.

> If you demand from me to spend time on more detailed explanation and you are unwilling to do the same, then I prefer to spend time on something else.

So you got nothing. I suspected as much, thanks for confirming.

Reply on news.ycombinator.com