Discussion in 'Politics & Society' started by SELVAM, Aug 30, 2017.
Was wondering where did these hate mongers and abusers go, rats are coming out slowly to cry foul.
100,000 stuck off the list? Link Link.
You guys have no ideas of cost of running any such operation. Keep digging crores of Jan Dhan account. GOod luck!!
This is what even RBI says but you can keep beating your chest (oops 56' chest!!!).
Will it build more houses?
Rats said- Demonetization will fail and it failed.
Modi fanboys- now finding 10,000 other ways to justify demonetization forgetting the main goal it was meant to achieve.
Rats will make echo chamber life tough!
Here is the link.
Tell me if you want the names. I can give you that as well.
We exactly dont know the reason behind: http://www.thehindubusinessline.com...anies-deregistered-by-govt/article9807724.ece
The data of 1.63 lakh deregistered companies is the position as of July 12, official sources said. The government has, however, not revealed the exact criteria on which companies were picked up for de-registration.
Section 248: http://www.mca.gov.in/SearchableActs/Section248.htm
248.Power of Registrar to remove name of company from register of companies
(1) Where the Registrar has reasonable cause to believe that—
(a) a company has failed to commence its business within one year of its incorporation;
(b) the subscribers to the memorandum have not paid the subscription which
they had undertaken to pay within a period of one hundred and eighty days from the
date of incorporation of a company and a declaration under sub-section (1) of section 11
to this effect has not been filed within one hundred and eighty days of its incorporation;
(c) a company is not carrying on any business or operation for a period of two
immediately preceding financial years and has not made any application within such
period for obtaining the status of a dormant company under section 455,
he shall send a notice to the company and all the directors of the company, of his intention
to remove the name of the company from the register of companies and requesting them to
send their representations along with copies of the relevant documents, if any, within a
period of thirty days from the date of the notice.
(2) Without prejudice to the provisions of sub-section (1), a company may, after
extinguishing all its liabilities, by a special resolution or consent of seventy-five per cent.
members in terms of paid-up share capital, file an application in the prescribed manner to the
Registrar for removing the name of the company from the register of companies on all or any
of the grounds specified in sub-section (1) and the Registrar shall, on receipt of such
application, cause a public notice to be issued in the prescribed manner:
Provided that in the case of a company regulated under a special Act, approval of the
regulatory body constituted or established under that Act shall also be obtained and enclosed
with the application.
(3) Nothing in sub-section (2) shall apply to a company registered under section 8.
(4) A notice issued under sub-section (1) or sub-section (2) shall be published in the
prescribed manner and also in the Official Gazette for the information of the general public.
(5) At the expiry of the time mentioned in the notice, the Registrar may, unless cause to
the contrary is shown by the company, strike off its name from the register of companies, and
shall publish notice thereof in the Official Gazette, and on the publication in the Official
Gazette of this notice, the company shall stand dissolved.
(6) The Registrar, before passing an order under sub-section (5), shall satisfy himself
that sufficient provision has been made for the realisation of all amount due to the company
and for the payment or discharge of its liabilities and obligations by the company within a
reasonable time and, if necessary, obtain necessary undertakings from the managing director,
director or other persons in charge of the management of the company:
Provided that notwithstanding the undertakings referred to in this sub-section, the
assets of the company shall be made available for the payment or discharge of all its liabilities
and obligations even after the date of the order removing the name of the company from the
register of companies.
(7) The liability, if any, of every director, manager or other officer who was exercising
any power of management, and of every member of the company dissolved under
sub-section (5), shall continue and may be enforced as if the company had not been dissolved.
(8) Nothing in this section shall affect the power of the Tribunal to wind up a company
the name of which has been struck off from the register of companies.
So, it does not directly prove anything. Most of these might be just dead ventures.
Rats don't matter. Demonetization is not a failure, there are certainly no parameters to back your claim as it was expected that growth would be decreased as GST also kicked in. Compliance has definitely increased, hard steps have been taken and will be taken against people who have lots of to answer, taxmen have identified and been building cases against them. I have seen hoarders scared shit during demo and trying not to do bad things as they know Modi could do anything and he will. After GST they don't have any good options.
In the end, rats would remain where they are and fanboys would be miles ahead. You want burnol?
Please give burnol!!
5.7% growth- lowest in three years doesn't shake a bit of confidence. Nothing else can!
Prove it's due to DeMo.
Too many bad economic policies! One is difficult to pin all the blame upon.
This clears some doubts.
De-mon — a multidimensional project
By S Gurumurthy | Published: 05th September 2017 05:00 AM |
Last Updated: 05th September 2017 07:34 AM | A+A A- |
That 99 per cent of the de-legalised Rs 500/1,000 denomination notes was returned back to the Reserve Bank of India (RBI) has been cited by opposition parties, experts and the media alike as the sole test of failure of demonetisation (which, for brevity, I shall henceforth refer to as de-mon). But it is a less than fair assessment of what was essentially a multipurpose project. The one-line conclusion certifying it as a failure judges a multidimensional corrective venture on the basis of one single parameter: the quantum of notes returned. This conclusion has become popular due to the tempestuous and irrational political debate we witnessed at the end of 2016. The media epilogue that Narendra Modi’s de-mon is a rout, based on superficial logic, is a bluff. But to call the bluff, we need a surgical analysis of de-mon, which was missing in the debate then and is missing even now.
The background to de-mon
A flashback to November 2016 when demonetisation was announced. The background to de-mon was the unprecedented rise in the circulation of high-value notes (500/1000) from Rs 1.5 lakh crore in 2004 to almost Rs 15.5 lakh crore when de-mon was announced — with their share in the total currency in circulation going up from 34 per cent to over 88 per cent. The Reserve Bank of India had told the government that a third of the high-value notes which moved out of the banking system, some Rs 6 lakh crore, never returned. They circulate outside the system — the inference being that this huge unmonitored cash was financing and building a massive black economy.
This was manifest in the steep rise in gold, stock and land prices by almost ten times in the six years from 2004 to 2010 as compared the previous five years, 1999-2004. That asset price rise was not stoked by any matching real growth. It was the other way round. The spurious rise in asset values generated the mirage of high growth in India like it happened in the USA prior to 2008. This was evident from the fact that despite the high growth of 8.6 per cent recorded in the six years [2004-2010], jobs rose by just 2.7 million as compared to the job growth of 60 million in the earlier five-year period (1999-2004) on the strength of a medium growth rate of 5.4 per cent.
And moreover, while the latter high-growth period witnessed an annual inflation rate of 6.5 per cent, the earlier five-year average growth period recorded an inflation rate of just 4.6 per cent. And further, the external sector did well in the medium-growth period with the closing years posting a current account surplus of $20 billion after 25 years of relentless current account deficit. But the latter six-year high-growth period accounted for a current account deficit of hundreds of billions of dollars.
It did not need a seer to say that the hyper GDP growth in the latter six years was just wealth-led growth — a mirage that yielded neither jobs nor gave external or internal comfort to the economy. The reason for this spurious growth clearly was the high asset prices, which were fuelled only by an unprecedented rise in high-denomination notes. No economist or commentator has disputed either the figures or the conclusions based on them. And yet none of these critical facts was noticed in the politically and ideologically surcharged debate on de-mon which was reduced to a single-point issue to the exclusion of its other critical dimensions.
Politics reduced de-mon to a single test
The debate on de-mon became utterly political, casting economics aside. Economists and camera-holding journos looked at people queuing up at banks to exchange or deposit the old notes and turned populist in opposing de-mon like politicians and media. De-mon was such an India-specific issue that it had no parallel elsewhere in the world. Foreign experts, who had no knowledge of India-specific issues, lambasted de-mon as a disaster. Local experts led by Dr Manmohan Singh said Narendra Modi has destroyed the economy. With the powerful national and global guild of economists, media and the opposition launching a war on him, Modi singlehandedly led the de-mon politics from the front, withstood the assault and went through the ordeal by fire.
He directly communicated with the people and requested them to bear with the trouble he was giving them. And they willingly endorsed him, as his huge electoral victories since he unveiled de-mon demonstrated. But in the process, Modi had to use the singularly popular logic, which they would easily understand — namely to detect and eliminate black money — to defend de-mon. And by inference, only the notes that did not return to the banks came to be regarded as black money detected and eliminated. The result was that a multi-dimensional correction to the economic drift came to be reduced by anti-Modi politics to the only proposition, that is: whether de-mon was a failure or success would depend on the sole test of how much black cash would or would not return to the banks. This reductionist logic has obscured a more wholesome view of the de-mon effect and has now demonised the project itself.
Multidimensional correction aimed and achieved
Apart from the fact that de-mon was aimed at puncturing the unprecedented high-denomination cash stock buildup that stoking an asset price rise and threatening the economy with an unmanageable future crisis, it was intended as a multidimensional correction to the economy. The multiple objectives inherent in the de-mon project were: (1) to catch black money; (2) to prevent its growth; (3) to expand the taxpayer base; (4) to arrest and deflate cash-stoked asset prices; (5) to bring down the burgeoning cash stock, particularly the high-denomination notes that had become the villain; (6) to suck up the excess cash with the public that was building a parallel economy to the banking system; (7) to enable the banks to multiply the additional deposits by fractional reserve model as lendable resources; (8) to bring down the interest rates; (9) to increase the share of financial savings in household savings; (10) to crash the unaffordable land prices to make housing affordable; (11) to organise the unorganised sector and provide organised support to it; (12) to shift from a jobless high growth to growth with jobs — namely growth of a real economy; and (13) eliminate fake currency and starve Kashmir terrorists and naxalites of funds.
The list is not exhaustive still. Against the background of a monumental cash-driven asset price-led deceptive growth, none of these goals could be attained except by sucking away the huge cash build-up through a high-value note ban. The ban would destroy the appetite for high-value notes, and transform the cash-led economy into a less-cash economy. So tested, Modi’s de-mon project has been a huge success in achieving its multiple objectives. But, unfortunately, the experts and the media who have taken a position against de-mon from the word go ceased to be objective to look at its multi-dimensional impact. Instead, they were actually waiting to pronounce it as a failure and once the RBI announced that 99 per cent of the de-legalised notes were returned, they clutched at it as the sole index of its failure. Equating the success of the anti-black money agenda of the de-mon project with only the quantum of de-legalised notes not returned is irrational and wrong. If black money holders daringly deposit the de-legalised notes in the banks, it becomes the subject of a tax probe. This aspect is completely ignored by the anti de-mon — read as anti-Modi — rhetoric which came to be regarded as a de-mon discourse.
Black money agenda a success, not failure
Before examining how far the de-mon project achieved its multi-dimensional objectives or the course correction it set as its goal, take the popular objective of unearthing black cash. The de-legalised notes not deposited in the banks, of course, give open-and-shut proof of black cash exposed by de-mon. But it does not mean that black cash deposited in the banks will go undetected. If the people who had black de-legalised notes took a risk and deposited them in banks, it only means that the income tax authority will have to scrutinise the deposits and collect taxes on such deposits — which of course takes time. And that is happening.
Some Rs 2.9 lakh crore deposits of cash is being investigated for tax. Black money detection under de-mon falls into three categories: (1) undisclosed income in de-legalised notes admitted Rs 29,000 cr; (2) old notes not deposited Rs 16,000 crore; and (3) most importantly, deposits of Rs 2.90 lakh crore under tax probe. The last component, which is huge, is being completely disregarded to conclude, totally unfairly, that the black money agenda of de-mon has bombed. The actual discovery of Rs 45,000 crore of black money and the potential discovery of Rs 2.9 lakh crore under probe — uncovering a total of Rs 3.35 lakh crore as actual and potential black money — has been achieved only because of de-mon. Even if half the potential black cash deposit is eventually taxed, that would mean detection of some Rs 1.5 lakh crore of black money, most of which would be recovered as tax and penalty.
None of the voluntary disclosure schemes attempted earlier was a success. The two such schemes which yielded a fair amount of tax were the one in 1997 which yielded Rs 9,500 crore and the latest in 2016 which yielded Rs 29,400 crore. De-mon is bound to yield multiples of the amount of tax extracted through voluntary disclosures in the past. Besides the uncovering of actual and potential black money of Rs 3.35 lakh crore, de-mon has expanded the individual income tax base. For 2016-17, as compared to the earlier year, some 57 lakh more assessees have filed returns, advance tax collections are up by 42 per cent and self assessment tax by 34 per cent. Ignoring such vital facts to conclude the de-mon project as a failure in uncovering black money is definitely superficial. It is also recklessly premature as, at any rate, one will have to wait till the tax probe is over to know how much the tax is recovered on the `2.9 lakh crore deposits under probe. By all counts the black money agenda of de-mon is a success, not a failure by any standard.
Why should it shake confidence? It was a hard step against many bad doings, we all knew economy would get hit because of this and it took a hit, GDP growth is decreased temporarily. Why should we shake confidence? Growth will be back on track after couple of quarters. You want action against malpractice or not?
One of the byproducts of demonetisation
in continuance with the crackdown on shell companies......
Your interpretation is too strict, I think you should see such moves with little bit of optimism.
Destroying the labor sector with minimal wage bills will help grow jobs and stimulate the economy. Bhakths will be bhakths
Filth which have no balls to work in/for india and which earn their living prostituting their work to the white trash in zealand are giving us gyan about how we Indians living in India should run our businesses. Pathetic really. May be I will take such trashes more seriously if those hypocritical trash give us gyan after they have stopped cleaning white asses for money and come to earn a living in India
De-mon — huge, successful course-correction
Of all the multidimensional corrective elements that were missed — actually, side-stepped if not suppressed — in the politically uproarious anti-Modi national discourse about the demonetization exercise, the most important element was the huge crisis which the note ban hedged and averted.
A huge crisis averted
To know what India escaped, one has to look at what the US got into. The fake asset prices that drove high growth in the US from 2001 to 2008 deceived the US and the world into believing it to be real and finally landed the whole world in the unprecedented financial and monetary crisis of 2008. The emergency measures to handle the crisis — nil to negative interest rates and printing money which sustain the show of growth even now but can trigger another crisis — are still on. But what is the relevance of what happened in the US prior to 2008 to the demonetization (in short, de-mon) discourse in India in 2016? Read on.
Asset prices in India rose by ten times in those six years as compared to the earlier five years — stocks by 311 per cent against 32 per cent in the earlier five years; gold by 320 per cent against 38 per cent; and land by 200-2,000 per cent, in different places, against 21 per cent. In India, the nation celebrated this mirror wealth effect growth of the US as real from 2004. But what really was the cause of the asset price rise? The normal rise in money supply from 15.3 per cent in the earlier five years to 18 per cent in the high-growth years cannot explain the towering asset prices. How then did India experience an unprecedented asset price rise? The answer lies in one word: cash — in particular, the unprecedented rise in high-value notes, a third of which, according to RBI, was circulating outside banks. The printed cash to GDP ratio too rose sharply during the asset inflation period. In just 18 months between April 2015 and September 2016, the stock of Rs 500/1000 notes rose by Rs 4.8 lakh crore! The bank indent — read the appetite — for Rs 1,000 notes, kept rising from 1,500 million pieces in 2014-15 to 1,800 million in 2015-16 and to 2,200 million in 2016-17. What reckless bank lending did to the US till 2008, reckless printing of high-value notes did to India. At the rate of printing notes recorded in 2015-16, in the next 72 months, by 2022, high-denomination notes would have doubled to Rs 36 lakh crore and, at the accelerating rate, to as high as Rs 41 lakh crore. This could have dynamited the nation’s financial order. De-mon became inevitable to avert the huge unmonitored cash-led crisis in the offing, to force the economy flooded by cash into a less-cash economy and to drive the excess cash circulating outside into banks. This extremely critical aspect was completely ignored in the irrationally noisy de-mon debate.
De-mon: A multidimensional success
Contrary to the widespread view, de-mon has been a success in bringing into tax account the unmonitored roaming cash amounting to some Rs 3.35 lakh crore — a large part of which is under a tax probe. De-mon has raised the individual tax base by 20 per cent, advance tax collections for 2017-18 by 42 per cent and self-assessment tax (paid now for last year) by 34 per cent. Both in bringing substantial black money of the past into account and in ensuring better tax compliance, de-mon has been a success. An incredible achievement of de-mon is the reduction in the total cash stock and the cash stock with the public. In absolute terms, cash stock has fallen from Rs 17.1 lakh crore to Rs 15.1 lakh crore — a reduction of Rs 2 lakh crore. Without de-mon, it would have topped Rs 22 lakh crore, that is, increased by Rs 4.9 lakh crore. Likewise, cash with the public fell by Rs 2.1 lakh crore. Had not de-mon intervened, cash with the public would have risen by Rs 6.6 lakh crore. Because of de-mon, as the cash with the public came down dramatically, the people’s deposits in the banks went up equally dramatically — from Rs 97 lakh crore to Rs 114.2 lakh crore.
The reduction of cash with the public and the rise in deposits with the banks will produce a dramatically opposite macro-economic impact. Cash with the public fuels and funds the black economy. Deposits in banks will fund the formal and organised sector. Moreover, by the fractional reserve model, money moving in and out of the banks multiplies as advances, by some six times. The flow of de-mon cash into banks — including black money — has already led to a cut in interest rates and a huge rise in lendable money, relieving banks that were stressed by illiquidity. With street cash in the banks, household financial savings rose steeply from an average of 10.5 per cent of the Gross National Disposable Income [GNDI] in the five years to 2016 to 11.8 per cent in 2017. Withdrawal of cash from fuelling asset prices will certainly hit GDP growth, but this near-term hit is necessary to shift the gear of the economy from jobless growth through asset price rise to growth with jobs. The impact of drawing money from the public and quarantining it in banks has crashed land prices in different parts of the country. The impact of this is clearly visible in the realty and housing sector, where asset price rise in land had stagnated the housing sector since at least 2012.
Crash spurious growth, trigger the real: The housing example
The first impact of de-mon was obviously on wealth effect-led growth itself. It is self-evident that when a huge volume of cash is withdrawn from the economy, growth will suffer. But what was implicit in de-mon itself became the charge against it. But this bitter pill was inevitable to course-correct the economy. See how it worked on the property market, the quality of growth in which is regarded as the index of real growth. A study by Liases Foras, an independent research company, showed that the gap between the index of housing affordability and prices which was equal at 100 in January 2005 began rising and reached a peak with the price index at 529 in March 2014 and affordability at 173 — showing a gap of almost three times. With unsustainable land prices stagnating the real estate economy, prices too stagnated later. Liases Foras said the gap between affordability and price was entirely due to speculation through the cash component which dominated the land market and also the secondary housing market that accounted for almost two-thirds of housing buys.
The study said, “the perfectly timed” de-mon would cut land prices by 30 per cent due to a reduced cash component, adding that making housing hit by speculative land prices affordable appears to have been achieved as the outcome showed a rise in demand for affordable housing. Liases Foras also pointed out that residential sales across the top eight cities of India had increased, taking the total growth to around 28 per cent post de-mon. Most of the rise is in the affordable range as the average loan disbursement of Rs 26 lakh per unit by HDFC showed. The World Property Guide (May 18, 2017) also saw a rise in affordable housing leading the housing recovery. The Confederation of Real Estate Developers’ Associations of India (CREDAI) said that in the long run de-mon would help organised developers procure land at more appropriate rates as such land will not be competing with buyers who were channeling their black money into land buying and holding. CREDAI said: “This will help in construction of more affordable houses and achieve the Housing For All objective by 2022.” The housing market has recovered despite disruption by the new real estate law and GST. This huge correction in the realty sector too has gone virtually unnoticed as the debate got reduced to merely the number of notes returned.
But, two caveats
But wrong follow up and irresponsible NPA norms could derail what de-mon has achieved. De-mon is a huge investment at current cost for future returns. Its hard-won advantages should not be frittered away. There was of course a costly miss in the conception of de-mon. The voluntary income disclosure scheme announced ahead of the de-mon project should have been clubbed with it so that those who had black cash would have disclosed it rather than risk depositing it in benami names, making tax collections time-consuming. This also would have avoided equating the success of the de-mon project to the quantum of de-legalised notes not deposited back and made collection of tax on black money as the real test. On the post-de-mon follow-up, two caveats. One, de-mon has sucked the entire cash stock into banks and it has also reduced the ratio of cash to GDP back from 13 per cent to less than 10 per cent of GDP. But this hit the informal sector which is funded almost entirely by black money. Closing the tap of black money that was funding the informal sector, which contributes to 50 per cent of the GDP and 90 per cent of non-farming jobs, has caused a dip in the growth rate and jobs. Had the Mudra finance scheme been implemented as originally conceived ahead of de-mon, this could have been avoided. But it did not happen then. And it has not happened even now. There is no follow-up of de-mon to relieve micro and small businesses of their distress.
This is telling on growth and jobs. Two, PSU banks, which control 70 per cent of bank de-posits, are paralysed because of the artificial NPA rules unsuitable to India, borrowed from Basel norms. The RBI is clearly responsible for the virtual stoppage of lending by PSU banks which has hit even medium and large industries. India needs a lending model based on future viability based on Indian conditions and not on the Basel rules of liquidity which is appropriate for countries which have capital account convertibility and which have opened the banking sector to foreign ownership. Neither is the case in India, and in addition state-owned banks control 70 per cent of bank assets. And yet RBI is virtually destroying Indian business by applying the Basel norms. And the government is just a mute spectator to this sad spectacle. Additionally, the forcible reference of the NPA cases of units viable for restructuring under the bankruptcy law is a disastrous way of dealing with NPAs.
The government and RBI have to forensically distinguish NPAs caused by financial dishonesty from policy- and market-forced NPAs and punish the former and restructure the latter if they are viable.
To end, unless Mudra is implemented forthwith as originally proposed, PSU banks begin lending again, and RBI frames restructured policies disregarding the Basel norms, the economy will slide into deep difficulties in the coming months and years. Are RBI and the Modi government listening?
And how is that a good thing. Do you bhakths actually think freezing the economic activity of the companies is what causes economic growth
Demonetisation isnt the only way to do it nor is it the best way to do it. May be bhakths will start considering proper methods to curb black money and corruption when they stopped consuming this much gou mutra
It is common sense that growth will dip after demonitisation. No one with a sane mind can say otherwise. Black money investors, shell companies, black cash trading and other illegal activities which indirectly contribute to growth will come to a crashing halt. Businessmen will want to wait the situation out. How can this dip not be expected?
Still, this is very much necessary. As citizens we should be ready to take it for the greater good.
This is the bottom line. are we ready to allow illegal business practices just because it adds to overall growth?
You seem to say yes.
Did congress government do anything at all to address this? Atleast this is a start. and I don't know about you, I want this government to crack down on black money transactions through shell companies and what not. GDP will bounce back Once the dust settles.
Raghuram Rajan has become pretty vocal after his retirement from Rbi. He lashes out on demo almost everyday. Congress or AAP will def offer him ticket in 2019
Separate names with a comma.