The new Rs 2000 note has probably been scrutinised more than any other note in the history of notes. People have dipped it in water, analysed its design, its colour, put it in the freezer, and of course rubbed it to see if its colour comes off. In fact many videos came on social media which showed that the new Rs 2000 note bled a pink colour when rubbed with a tissue paper. Some people even began claiming that this proved that it is a fake note and the RBI had been printing poor quality of counterfeit currency. So what is the truth?
The note in question
The Economic Affairs Secretary Mr Shaktikanta Das set the record straight yesterday:
He clearly says that even the earlier notes of Rs 500 or Rs 1000 and even the current Rs 100 notes tend to bleed colour, because they use a special kind of ink called the “Intaglio” ink. He says that even if you take a new Rs 100 note and rub it vigorously with a cotton piece, some colour will definitely come out. The reason he explains, is that this is the inherent nature of the ink called Intaglio. Further, he goes on to say that if the colour doesn’t come off, then it maybe a fake currency note.
Will this explanation be enough to quell rumours? Will it satisfy the appetite of conspiracy theorists?
A couple of days ago, we listed the 10 worst rumours which were circulating in the mainstream media and the social media with regards to the demonetisation scheme, which were causing unnecessary panic and misinformation. And even as some of those rumours might still be circulating, we were informed of even more such rumours. Here are the next set of rumours you ought to be aware of:
1. Indelible ink to be used to identify people who’ve made withdrawals
This comes from the latest press conference by the Economic Affairs Secretary Mr Shaktikanta Das. Even some editors and media houses claim this:
Indelible Ink
The fact is, as seen in this video where the secretary is seen announcing the measure, the indelible ink will be used only for over-the-counter exchange (and not withdrawals) of cash for new currency notes. This is not a new rule per-se because even the original notification said that the Rs 4000 (now Rs 4500) exchange mechanism was available to each person only once, and not per day. Hence the use of ink only ensures stricter implementation of an existing rule.
2. Colour comes out of new 2000 rupee note, so it could be fake or insecure
Some viral messages and videos doing the rounds claim that the new 2000 rupee note is poorly designed and printed, especially because colour comes out if you rub it with wet a cloth. This too was rebutted by the Economic Affairs Secretary, who revealed that every note will have colour coming out if rubbed in that fashion. In fact, he added that due to a special ink used for pinting notes, the colour should come out of new notes. He clarified that even the 100 rupee notes, when freshly printed, would show similar results when rubbed with wet cloth or cotton.
3. There are only 2500 ATMs in rural India
A person connected with the Congress party was spreading this news on social media that was believed by many in the mainstream media. This is very far from the truth. As on 31 Dec 2015, the number of ATMs in rural centres was 33,250, and in semi-urban centres there were 51,942 ATMs
4. Any woman who is about to be married can withdraw up to Rs 5 lakhs rupees
You might have seen this WhatsApp forward:
Beti bachao?
There is no truth in this. Neither the RBI nor the Government of India has announced any such measure. Further, variants of the message bear the name of one Avinash Singh who is the ADM of some city. He too has written a letter denying any such option for women about to be married. DCP North Delhi has also denied this rumour:
There is NO such decision that if DCP certifies regarding marriage in family, person can withdraw 5 Lacs from their account. It’s a #Rumor!
Update (17 Nov 2016): Now the government has allowed families, who have weddings coming up, to withdraw up to 2.5 lakhs from banks.
5. Sensex falls by almost 700 points as markets open after weekends
The Indian Express tweeted this but probably forgot that Monday 14th November was a holiday for the bourses on account of Gurunanak Jayanti:
Sensex crashes on a holiday
6. Gandhiji’s pic deleted from new Rs 2000 note
This is probably the most stupid rumour but there are people who actually believe this. Just hope they had flipped the note and seen the reverse. This is the case with most older notes as well, Gandhiji’s picture is only on one side.
7. RBI plans mass leave on November 19 to protest against Modi’s Black Money Campaign
You might see this news on sites like “The Times Headline”
Back in time?
Fact of the matter is this news is based on a similar story from 2015, when Reserve Bank’s employees proposed one-day mass leave to protest what they termed as the government’s intention to curb the apex bank’s activity and intervening into monetary policies. This is a story from 2015 and has no relevance today. AAP too has been caught using old news articles to create confusion and chaos.
8. Gold (presumably converted from black money) worn by BJP leader’s daughter
Earlier Congress IT cell circulated picture of an unidentified girl, claiming she was a BJP leader’s daughter with bundle of new 2000 rupee notes. Same trick has been repeated again by circulating picture of a girl wearing gold ornaments and claiming she was a BJP leader’s daughter. A journalist working at The Hindu even tried to link it with the demonetisation drive. Perhaps to suggest that people related to BJP have already converted their black money into other assets, as is being claimed by Arvind Kejriwal. Fact is the girl in the picture circulated on social media is not BJP leader’s daughter, and in fact doesn’t look like her even remotely.
Mistaken identity or deliberate mischief?
9. News about demonetisation was leaked and published in a Gujarati newspaper in April this year
Congress and AAP have claimed that the news about demonetisation was leaked to some people and they have been making ridiculous claims as proof. One such proof is provided as cutting of a Gujarati newspaper that has a news report published in April, which said that government has decided to discontinue 500 and 1000 rupee notes.
Rajkot based evening newspaper Akila published the article on 1st April 2016
Truth is that the above news report was actually a April Fool’s prank that the Gujarati newspaper had published.
10. Gujarati businessman who bought Modi’s suit deposited 6000 crores in cash
A viral news article claimed that Surat based businessman Laljibhai Patel had surrendered a whopping 6000 crore rupees in cash after the demonetisation drive. He was identified as the same diamond merchant who had bought Narendra Modi’s monogrammed suit, which was auctioned by the Prime Minister to raise funds for cleaning of river Ganga. After the news went viral, local media contacted Mr. Patel, who denied surrendering such huge amount of cash. He pointed out that even the unverified reports say that the man rumoured to have surrendered so much cash was a builder, while he was a diamond merchant.
Funnily, or rather tragically, The Indian Express blamed the social media for spreading the rumour, while its sister publication was the one guilty in spreading this rumour:
Ever since the scheme of demonetisation of Rs 500 and Rs 1000 notes has kicked in, some in media and social media are desperate to spread malicious rumours to thwart the scheme. We had already listed such rumours here and busted each one of them. Political parties are also not far behind with Arvind Kejriwal and AAP leading from the front. We showed you how Kejriwal’s baseless allegation that some people were tipped off before the scheme started was devoid of any logic.
It appears that now AAP has shed any pretence of being a logical opposition and has decided to resort to spreading rumours, in the hope that some large scale disruption takes place. Kejriwal on his part has tried his best to create the “afra tafri” atmosphere by repeatedly using this phrase:
Panic everywhere. चारों तरफ़ अफ़रा तफ़री। लोगों के घरों में खाने का सामान ख़त्म हो रहा है। Emergency cabinet meeting at 3 pm at my residence
And AAP has gone one step ahead, choosing to lie to the common man whom they claim to represent. Posted on the official AAP Facebook page at 9 am today was the following news, along with a meme, which claimed RBI was going on a 1 day mass protest.
AAP’s Facebook post
Attached with the meme was a news link which showed the source of the news. Click here for the full link, and see what news do you see. And specifically check the date.
Yes, Aam Aadmi Party has shared a news story from November 2015, trying to portray as if it is happening now in November 2016. The proposed protest last year was in relation to the proposed mechanism of Monetary Policy Committee. And obviously nothing to do with the current demonetisation scheme. Then why did AAP share this story now? What was the intention of posting a news in November 2016, about a strike which was supposed to take place in November 2015?
Is this just a poor mistake? Or is this a deliberate misrepresentation of facts? If it was a genuine mistake, then it is highly surprising that AAP has not removed the post even now, although the first comment on the post alerting them about the “mistake” was posted just 43 minutes after they posted the image. Further, other people kept on alerting AAP yet the post still exists:
The warnings
This reveals that the intention of the anti-corruption party AAP is to only create a sense of panic among the masses, hoping that something untoward may happen and the scheme fails. Will Government of India act on this?
In India, more than being a liberal – where you are willing to accommodate dissenting voices – it is important to appear a liberal – where you shout every hour that you’re liberal and thus drown out the dissenting voices.
This shouting is a form of virtue signalling that helps people with otherwise sad credentials to aspire for respectability in a particular social circle.
And a lot of so-called liberals indulged in collective shouting yesterday after mobile wallet brand Paytm released an ad that hurt their guilty conscience.
The ad showed a woman from upper middle class talking about how demonetisation stopped her from paying money to her maid, as she didn’t have ready cash. The character was going on and on with her rant when the maid interrupted her and asked her to stop making excuses and transfer money to her via Paytm. The upper middle class woman in the ad was shocked at this awareness and technology adoption by her maid. And that was the end of the ad, telling people to use Paytm if cash was not available.
https://www.youtube.com/watch?v=UxGyhWOhBzA
The ad upset some “liberals” so much that they uninstalled Paytm from their smartphones and tagged its founder Vijay Shekhar Sharma on Twitter, threatening that all of them will uninstall the application and thus hurt his business.
Many of these outraged shouting virtue signalling liberals were from the media industry that has the power to hurt a brand’s image through biased reporting. Perhaps that led to Vijay Shekhar Sharma apologising and Paytm deleting the ad from its Twitter page.
Paytm founder forced to apologise. Threat was dressed up as “feedback”.
While economic boycott is a different matter, what is crucial here is to notice how the ad pricked the guilty conscience of the so-called liberals, who grouped up to launch a mob attack. But just as their threat was dressed up as “feedback”, their angst at being exposed was dressed up as “compassion”.
Some of them claimed that the ad was patronising towards the maid. Really? Fact is that the ad showed a confident maid shutting her patronising employer up. Others said it mocked situation of people who were facing inconvenience due to demonetisation. No. It mocked those who were using the excuse of inconvenience to be lazy in general and unfair to maids in particular, so far as the ad’s copy was concerned.
The truth is that the ad touched them where it hurts the most. Where a privileged class person arrogates the right to speak for the underprivileged class under the garb of activism. Where this class assumes that maids must be poor enough not to have a smartphone (even though some really cheap ones are available) and stupid enough not to know how to use apps (though maid’s husbands can be Uber drivers using an advanced app? A hint of sexism there? Poor women can’t use apps?).
When a maid decides to speak for herself and comes up with a view that is not aligned with the ‘liberal’ stand, this privileged class is taken aback and is forced to shut up. This makes them angry. And this is what made them shout, uninstall the app, and tag the Paytm founder with their threats.
The bunch that shouts ‘rising intolerance’ and ‘free speech’ on every possible occasion, successfully arm twisted a brand to take off their ad.
But as it happens on Twitter, every shouting is met with counter shouting. People asked Paytm if they will wind up their business if enough shouting virtue signalling liberals told them that their business was a scam? No argument, no logic required?
Finally good sense prevailed and Paytm brought back the ad with a minor modification; where the maid is being a bit more respectful to her employer by not terming her excuses as “drama”. Ah, that was another thing that hurt the guilty conscience of virtue signalling liberals. The drama by the elitist snobs of being considerate towards the unwashed masses.
With our strong belief in financial inclusion for every Indian, here is our upgraded ad. pic.twitter.com/DiUbNuERGK
This is not for the first time when the so-called liberal crowd has forced brands to take off ads in the last couple of years, all while shouting that they were facing intolerance under the new regime. Earlier Pepsi was forced to delay release of its ad as some so-called liberals claimed it mocked FTII and JNU students. Havells was forced to take off an ad as people who can’t see beyond caste termed it casteist. And Yatra.com was attacked for an ad that had a character similar to JNU lout Kanhaiya Kumar.
So much for creativity, free speech, tolerance, accommodation, and liberalism.
As we enter the 5th day of the government’s ambitious demonetisation drive, the dust looks far from settled. People are flocking to banks and ATMs to get that wad of acceptable cash. While largely people are calm and accepting the inconvenience as a part of their sacrifice for the greater good of the nation, there are some who want the scheme to fail at all cost.
Baseless rumours are being spread to create panic among the citizens. The culprits can be anyone; political parties with vested interests, power brokers in the media, your neighbours who sold their ancestral property for 60:40 cash, or maybe a stupid friend who believes everything he receives as WhatsApp forward.
In such a scenario, it’s important to separate the wheat from the chaff and also to identify poisonous weeds in your backyard. So we list down 10 things that you or someone you know might have believed as true, but which are rumours or plain lies:
1. Transporters are going on strike, so you must stock up essential goods in your household
You might have received the following information on WhatsApp or seen it on Facebook or Twitter. It says that the transporters have decided to go on a strike starting tomorrow, due to which things like groceries or FMCG goods won’t be able to reach markets.
Rumour about impending transporters’ strike.
Truth is that no such strike has been announced. The same has been debunked by the Ministry of Road transport and highways.
No call for strike by AIMTC. Please do not believe in rumours.
2. Fake currency of new denomination already in the market
A story going around says that a vegetable seller claimed he was duped with a fake Rs 2000 note. This spread panic that the new currency was not secured enough. It turned out that he was fooled by a coloured xerox of the note. The headline of the new report was misleading that led to the rumour of a counterfeit currency being involved.
Take a look at the supposed counterfeit note yourself below. While one feels bad for the poor vegetable seller, isn’t it too easy to spot that the one on the top is a coloured xerox copy? Just look at the edges. You don’t even need to look for further security features such as watermark.
Missing stripes, incomplete national emblem and odd margins. Too bad even for fake.
3. New 2000 rupees note has a nano chip
While on one had you have rumours about the currency already being faked, there is a flip side to this rumour that claims that the note is super secure, loaded with a nano chip that can be tracked. Zee News even aired a report about it. No, there is no chip.
4. Shopping mall in Delhi looted as people didn’t have cash to buy goods
There are some reports about shops being looted in some parts of the countries because people didn’t have ready cash to buy things. A viral video clip shows people in Delhi looting a mall. People are sharing the clip claiming the looting happened due to demonetisation troubles.
But that is far from the truth. The mall in question was a self-catering mall where card holding members take along the stocks they need. Yes, there was disorder due to some miscreants, but it was not looting. Delhi police too clarified it on Twitter.
5. Salt is selling at high prices all across the country
This one is perhaps the most rampant rumour, even NDTV reported about the rumour in such a way that it helped spread the rumour. In short, some wise men decided to spread the word that there’s a huge crisis of salt in the country which led to further rumours about its price per Kg increasing to Rs 400. It led to some panic buying, but salt was not being sold at any exorbitant rates in the country.
Union Minister of State for Commerce and Industry, Nirmala Sitharaman herself had to step in to curb the rumours.
1. No shortage in the supply of edible salt.Baseless rumors being spread. Salt Commissioner& Jt.Secretary Shri Raghavendra monitoring ….
6. 200% penalty will be imposed on cash that will be deposited in banks
Various numbers are doing the round claiming people will have to pay high tax on bank deposits above 2.5 lakh rupees. From 95% tax on the deposited amount to whopping 200% on the deposit amounts. This OpIndia report debunks the rumour and is also a great insight about how the taxes will be levied.
7. BJP leaders and their relatives already had 2000 rupee notes
This rumour has been spread by activists of the Aam Aadmi Party and the Congress party. This OpIndia report exposes the lies spread by Congress IT cell where picture of a bank employee was circulated as picture of a BJP leader’s daughter, while this report debunks another such claim made by AAP supremo Arvind Kejriwal.
8. Violence outside banks and ATMs due to long queues of people withdrawing cash
News agency PTI put out a tweet claiming the Delhi police got a staggering 4.5 thousand calls about violence outside banks and ATMs. It should be noted that reports or information by PTI is carried as it is by news organisations and any error, rumour, or lie will be repeated thousand times.
And this claim by the PTI turned out to be hugely exaggerated and misleading. Delhi police indeed received many calls but not related to violence outside banks or ATMs.
9. Many deaths due to inconvenience and unavailability of ready cash
While there indeed has been an unfortunate death, it has now come to light that some other deaths are being deliberately linked to demonetisation by some in the media. For example, relatives of a person who unfortunately died, have themselves clarified that the death had got nothing to do with demonetisation.
How media is using tragedies to invent controversies.
Similarly, another such unfortunate death reported by media and linked to demonetisation is turning out to be a case of accident or suicide due to personal issues (update).
Husband says he doesn’t know reason behind alleged suicide. Family insists no suicide. No one links it to closed ATM. Yet see the headline. pic.twitter.com/gGfsya9SbL
10. Pictures of humongous queues at banks or crowds protesting against demonetisation
While there is no denying the fact that there are queues outside banks and ATMs, many miscreants are spreading photos from different times and places claiming they were pictures of queues and chaos while withdrawing money. People belonging to political parties are even using old pictures of some other protests to claim that citizens are protesting against the demonetisation drive.
Some of these have been exposed by people on Twitter, but you may still receive those on WhatsApp or Facebook:
Fear mongering yet again by shameless congressi @brijeshkalappa. The video he quotes is from September 2016. Protests over Kashmir unrest. pic.twitter.com/T9VBpvpvMC
So be alert and aware, and don’t believe such rumours. Also, spread this article in your social circle so that these rumours can be stopped from spreading and creating panic among the citizens.
Dance like no one’s watching, Sing like no one’s listening, and Write articles in the mainstream media like no one’s fact-checking: This seems to be the modern mantra. And one devout follower of this mantra is Shri Raghav Bahl, founder of the Bloomberg-Quint, an Indian online “Business and Financial” site, in tie-up with the worldwide giant Bloomberg. Bahl displays his fact-free lifestyle in a particularly obtuse piece titled: PM Modi, Demonetisation ‘Brahmastra’ Could’ve Avoided Hurting Poor
As is fashionable these days, the piece starts with an example of the quintessential maid, who is dumb enough to be conned into giving her Rs 5000 (in notes of Rs 500) to some “friend” shopkeeper for just 5 notes of Rs 100. Maybe this maid studied at FTII, but I have 2 maids (house-helps to be politically correct) at home and 1 at work; and all 3 of them knew exactly what was going on. Hope this maid of Bahl’s fantasies isnt like one of those fake “gau rashaks attacked me” stories.
Bahl’s entire article argues that the government should have given time to people till 31st December. That may sound so good given the reports about inconvenience people are facing due to long queues at banks. But Bahl himself agrees that giving this time could have given an escape route to people with unaccounted cash, who could have indulged in some deals to turn that cash into white money or legal assets. Now they can’t deal with that cash as it’s no longer a legal tender.
So what exactly is Bahl’s point? He essentially says that people can still do some “jugaad” and convert their unaccounted cash into white money. He offers ridiculously simplistic explanations (actually there are no explanations, just fantastical stories) in his article as how this jugaad can happen. If only real life was so simple as if playing a video game with cheat code.
In this video game that Bahl is playing through his article, there is a character called “Rambhai”, the quintessential corrupt businessman. Before we get to how Rambhai actually manages to get rid of his ill-gotten cash through jugaad, let us study his character, through Bahl’s own words:
“At 8 pm on 8 November, Rambhai would have finished a greasy vegetarian meal and settled down to listen to his hero, Prime Minister Modi’s specially televised address.”
You say it best when you say nothing at all Raghav-bhai. What Bahl wanted to say was Rambhai was a Hindu, high-caste Gujju (hence vegetarian), possible gau-sevak, corrupt Modi bhakt, but wrapped it in euphemisms like “Ram” bhai, and “vegetarian meal”.
Now that we know Bahl’s Rambhai, let us enter Bahl’s cuckoo world where all laws cease to exist and only jugaad (which he never cares to explain) reins.
So Rambhai apparently has Rs 1 crore in unaccounted cash, which he has to finish before the deadline of midnight 8th November. How does he do it? Simply pays Rs 60 lakhs to a goldsmith (Shyambhai) for buying gold at 8.45 pm, and subsequently, at an undisclosed time, pays Rs 40 lakhs to a Tata Motors dealer for a sparkling new Jaguar XF.
Forget about the gold for a bit and let’s talk about the Jaguar. In Bahl’s world, Tata Motor’s showrooms are open beyond 8.45 pm at night. Nonetheless, I checked up with the local Mercedes showroom for the procedure to buy a car. They said irrespective of my mode of payment, I would need to submit my PAN. Why, because a PAN is mandatory while buying or selling a four-wheeler that requires registration under the Motor Vehicles Act, 1988, irrespective of its value. PAN is also mandatory for all transactions above Rs 2 lakhs. And more recently, there is a levy of 1% TCS on sale of all motor vehicles costing over Rs 10 lakhs, which again entails a declaration of PAN.
How does Raghav-bhai imagine Rambhai will avoid all this reporting? Jugaad. Yes, he says that the local auto dealer of Tata Motors would do some “usual jugaad”.
So is Raghav-bhai suggesting that Tata Motors would sell a luxury car worth Rs 40 lakhs without an invoice? And would account for this mysterious disappearance of inventory by claiming “Modiji ne kiya hai”? Or does he suggest Tata Motors does not maintain documentation for purchases and the entire product chain, which is why it is so simple for them to do this magical “jugaad”? Maybe this is why Mistry was sacked then?
Since there was no explanation or hint of this jugaad, I tried to hazard a guess; maybe the dealer puts a dummy guy’s PAN. Cash from Rambhai but PAN of Laxmanbhai (why should only Bahl create characters?). But even in that case, the dealer has to register the car in Rambhai’s name only. So again, it will be a mismatch and this jugaad can easily be spotted as fraud by authorities.
So there is no explanation of how this “usual” jugaad is happening, but we are supposed to believe that it is happening. Going further, Raghav-bhai mentions that “Rs 40 lakh of black money has made its way into the Tata Motors’ balance sheet”, so how does this exactly work? Tata Motors dealer doesn’t do any documentation which incriminates Rambhai, YET, the money is reflected in Tata Motors accounts. Super-Jugaad this.
At this point I was reminded of a post that I saw on Facebook by one of my friends. He claimed that some bankers were taking “cut” of 10% and converting unaccounted cash into white money. How? In the same Facebook post he claimed that he doesn’t know how, but this is happening. I laughed at such rumor mongering, but now I think he should be hired by Raghav Bahl as a senior correspondent at The Quint. He can also drop words like cut and jugaad without any explanation. Poor guy is writing Facebook posts when he could have written editorials.
Coming back to the Bahl’s Rambhai, he gets a car and gold and apparently all his accounted cash is now white, because taxmen are blind not to see a luxury car or glitter of gold. Yes, in Bahl’s story, Rambhai is all cool and safe. Now the story moves to Shyambhai, the person who sold gold to Rambhai and is saddled with the cash now.
How does Shyambhai get rid of this cash in Raghav-bhai’s wonderful lala land? He buys a Harley, an iPhone and an “Italian Jacuzzi”. And just like that Shyambhai’s problems are over too. But what about the sellers of these goods, the other “bhais”? How do they account for this sudden cash without raising invoices in the name of Shyambhai? Unless Multinational companies like Harley Davidson and Apple also practice the “Tata Motors Jugaad” of not maintaining records yet adding to their topline?
But this is the example of just one Rambhai, what about the millions of such Rambhais? Well, Raghav-bhai has an answer for that too:
“They will round up 1 crore poor, unemployed people all over the country, especially in small towns and far-flung villages. For 50 mornings, these 1 crore people will throng banks and post offices, depositing cash in small quantities in their hitherto unused Jan Dhan accounts. Each will deposit an average of Rs 3 lakh, until Rs 3 lakh crore are in the bank.”
Of course, rounding up 1 crore poor people and ensuring 100% secrecy and privacy for such dealings is so easy in the video game real world. I mean if the “Tata Motors Jugaad” is doable, why not this? It’s not as if the Government can not trace and monitor this sudden spurt in Jan Dhan Accounts now, can it?
In a parallel universe
And that is how Indians like Rambhai and Shyambhai would have made their way around Modi’s seemingly impregnable plan. So easy no? And with that, Raghav-bhai proves that while corrupts like Rambhai and Shyambhai are all cool and safe, the poor and honest are inconvenienced by standing in queues and struggling for ready cash.
And why is this all believable? Because the learned Raghav Bahl wrote this all while chewing on his beef steak after signing a petition for PETA (hey, even I can hazard a guess on Raghav-bhai’s dietary habits going by his world view right?). And of course because no Government or media body would ever dare take any sort of action an any of the highly misleading content. Why? Because then Raghav-bhai would scream “Emergency”.
Arvind Kejriwal was an Income Tax Officer in the IRS. Being in this position, one would expect him to be fairly conversant with how the financial world works, how taxes work, how banks work, and how the parallel economy works. After he quit his job, he was known as India’s anti-corruption crusader, along with Anna Hazare, who has now lost faith in Kejriwal.
Thus, due to the nature of his previous work, and the cause he has always publicly espoused, one would have expected Kejriwal to back the demonetisation scheme. After all, even sworn political enemies of BJP like Nitish Kumar and Sharad Pawar supported the move. If not support, given his educational degree of being an IIT-ian, coupled with his work experience, one would at least expect Kejriwal to critically analyse the scheme and point out to serious, objective loopholes.
Today, the AAP supremo and Delhi Chief Minister announced that he was going to address a press conference where he will expose a “scam” related to demonitisation. But instead of any facts related to any scam, we got exactly what Delhi’s voters have got: trash and lies.
Arvind Kejriwal concocted gossips like “some people have told me that BJP had informed some people before hand”. While this is in line with his style of spreading rumour, this time he also made some allegations which can easily be fact-checked.
For example, this was one of his claims:
“In previous quarters, deposits (growth) in banks were negative. But in the July-to-September quarter, such large amounts were being deposited in the banks. Who did all this money belong to? Had BJP told its friends in advance?”
This is so hilarious that it is sad that an IITian, IRS officer, who supposedly is against corruption, uttered such a non-nonsensical remark. Finance Minister Arun Jaitley has studied the matter and said the increase was only for September 2016, because of the release of Pay Commission’s salary arrears on 31 August. Never mind that, and let us analyse what Kejriwal said.
First of all, the basic premise of this argument is ludicrous. Let us assume for arguments sake, BJP did tip off some people and they did deposit their black money in advance, before the November 8 announcement. What end goal did they achieve? What incremental benefit did they get by depositing black money in banks, 1-2 months before the Government made it mandatory? Banks are highly regulated and for many years now, even a deposit above Rs 50,000 needs a PAN to be furnished. So these so-called corrupt people can easily be detected.
Secondly, contrary to popular belief, an unexplained deposit into a bank before 8th November, and another after 8th November, face the exact same legal punishments and penalties (the 200% penalty). This is because this penalty flows from the amended Section 270A of the Income Tax Act, which came into effect from April 2016, and it covers a wide range of tax evasion and fraud, and not just cash deposits. So if these crooks, whom BJP had allegedly tipped off, deposited cash before 8th November, the source of which cannot be explained, then they will face the exact same legal process as the ones who are depositing now. So what was the exact intention of the BJP when it, as per Kejriwal, informed some of its friends?
Thirdly, if someone actually puts his black money into banks even when the Government had not asked for it, he should be called an idiot. He has himself disclosed to the formal economy that he has so much unaccounted wealth. Instead, if a real crook had known in advance about this scheme, he would tried aggressively to convert his hard cash, into other assets like real estate or gold. Remember the reports of how gold-smiths were the favoured location for many people soon after PM Modi made the announcement?
Fourth: Kejriwal’s idiotic claims can be contested using his own party’s statements. In 2015, his own party was under scrutiny for accepting cheques from dubious companies and the allegations were of money laundering. Then, his own party had said that “to put Rs 50 lakh in an Indian bank without being detected is making a mockery of India’s banking system”:
AAP 2015
Yet, today Kejriwal claims that thousands of crores of black money was deposited in banks in a move to negate getting caught by the demonetisation scheme.
Arvind Kejriwal also claimed that BJP leaders had 2000 rupee notes with them even before the announcement was made public by the Prime Minister. He based his claim on a few tweets he had posted and shared earlier. Even the Deputy Chief Minister of Delhi, Manish Sisodia had shared similar tweet.
पंजाब BJP नेताओं के पास अगर 6 नवम्बर को ही 2000 के नोट की गाड़ियां उपलब्ध थीं तो यह देश के साथ बड़ा षडयंत्र हैं। इसकी तुरंत जांच होनी चाहिए। https://t.co/kHTYqmSTLw
In one of the tweets, where Kejriwal quoted tweet of an abusive journalist, he claimed that it was the proof that BJP members had got their old 500 and 1000 rupee notes exchanged before the announcement was made public:
ये सबूत है कि भाजपा वालों ने और इनके दोस्तों ने अपने पैसे पहले ही बदल लिए थे। बाक़ी देश की ऐसी तैसी कर रहे हैं अब। https://t.co/gCEQRP3sOi
Making such allegations based on a tweet is very flimsy and almost laughable. It should be noted that the BJP leader in question, a certain Sanjeev Kamboj, had shared pictures that were already public a day before.
For example, compare his tweet and another tweet that was posted a day before by a person who has got nothing to do with the BJP:
Looking at the content and pictures in both the above tweets, it becomes clear that the BJP leader was sharing some “leaked” pictures that had already gone viral on social media by then. It was not a picture of him personally holding that cash, as suggested by Kejriwal.
It should be further noted that reports about RBI introducing a 2000 rupee note had been published in October itself and leaked pictures of such notes had been doing the rounds. On 5th and 6th November, many people posted such leaked pictures, one of whom happened to be a BJP person.
This can hardly be termed as conclusive proof of BJP people having exchanged their notes in advance. Also, will a person really post a picture on a public forum like Twitter if he indulged in some secret act? Kejriwal thinks so.
In his press conference, Kejriwal made another fascinating and self incriminating claim. He claimed that Dollars were being sold in “black” for up to Rs 120 per dollar in Delhi itself.
This, ladies and gentlemen, is Delhi’s Chief Minister, announcing at a press conference, that he is aware of money launderers in Delhi who are converting their illicit money. So has Kejriwal given the information of such people to the cops? Or are these imaginary people?
Instead of acting against erring persons, Kejriwal actually went ahead and announced that his state government was not carrying out any raids against anybody in any suspected case of cash hoarding or tax evasion.
I reiterate- Delhi VAT dept is not conducting any raids. It is income tax dept of Modi govt conducting raids in markets. Pl spread this msg
Rahul Gandhi, who had vowed to learn from AAP after the grand old party suffered defeat in 2013 Delhi assembly elections, seems to have perfected the art. The Congress Vice President beat Arvind Kejriwal of AAP in creating a TV drama when he decided to stand in a queue outside a bank today.
The party claimed that this step by Rahul Gandhi was to stand in solidarity with the common man who was facing inconvenience due to demonetization of old 500 and 100 rupee notes.
Earlier, there were media reports about long queues outside banks and ATMs and new currency notes not being available at some bank branches. NDTV, the TV news channel considered close to the Congress party, even asked people to send video clips that showcase the trouble people have been facing.
And it appears that Rahul Gandhi volunteered to make one such video clip.
In the afternoon today, Rahul Gandhi visited the Parliament Street branch of State Bank of India in Delhi to exchange 4000 rupees of old notes. If the aim was to witness how people were inconvenienced, Rahul Gandhi succeeded, for his presence made life tougher for people standing in the queue.
Rahul Gandhi’s visit was accompanied by security persons as well as media persons visiting the aforementioned bank. This caused even more inconvenience to people standing in the queue. There were reports that people were even not allowed to enter the bank after Rahul Gandhi went inside to exchange the money.
A senior correspondent with Hindustan Times shared a video clip where a man was complaining about inconvenience he faced due to Rahul Gandhi joining the queue:
Among those inconvenienced by Rahul Gandhi’s photo-op were senior citizens who couldn’t endure the pain of standing too long in the queue as the proceedings got delayed with a VIP entering the bank.
Government’s decision to scrap old 500 and 1000 rupees notes and replace them with new ones is primarily aimed at curbing the domestic black money hoarded in cash. But it has another objective too – to help the country move towards cashless economy.
People like Nandan Nilekani, former CEO of Infosys and architect of the Unique Identification Authority of India (UIDAI), has been among the votaries of cashless economy arguing that not only will it benefit the common man in receiving government benefits, it will also curb corruption.
Demonetization of high value currency notes is being seen as an opportunity to introduce people to cashless transaction as they will be short on cash for a few days due to rush at banks and ATMs, and thus the other option remaining is to use digital wallets or other modes of digital payments.
And this opportunity is being grabbed by many. Digital wallet Paytm coming up with a full page ad congratulating PM Modi and using his image has been creating a lot of buzz, but Paytm is not alone that is latching on to this opportunity.
Online food ordering app Swiggy, where one can pay through digital wallets or credit cards if one doesn’t have ready cash, too rode on PM Modi’s name and offered cashback to new customers in shape of a coupon code “MODI”:
As the tweet above says, perhaps Swiggy was fortunate that Delhi CM Arvind Kejirwal didn’t get their promotional SMS else he would have questioned the “deal” between Swiggy and PM Modi too the way he insinuated a deal between Paytm and the Prime Minister.
Surprisingly, Jio Money, the digital wallet offering from Reliance, doesn’t seem to be trying to ride this demonetization wave through such marketing gimmicks. It should be noted that Jio was the first one to use PM Modi’s image in an ad – a trick that Paytm copied.
While Paytm and Swiggy used PM Modi’s name to push people towards cashless transactions in wake of the demonetization, other entities, especially e-commerce websites and banks, were keeping it simple:
Banks have been sending SMS and emails to their customers asking them to increasingly use their debit cards or credit cards for transactions. Banks like ICICI, who have their own digital wallets, are urging their customers to use their products to escape long queues at banks and ATMs.
But the most surprising use of riding this demonetization wave and use of PM Modi’s image has been an ad issued by a lifestyle brand Lawman Pg3. We are not yet sure how do they benefit from cashless economy:
Now lifestyle brand ‘Lawman Pg3’ congratulates PM for demonetisation drive with full page ads..!!! ???? pic.twitter.com/wclFTiFtDh
There are some things the media just doesn’t understand. You may have seen various reports which range from the scary to the alarmist on the topic of demonetization of the Rs 500 and Rs 1000 notes. In fact, here social media warriors must also take the blame for spreading grossly exaggerated news. Yes, I am talking about the reports and memes which say that you will have to pay almost 95% tax on the old cash you deposit in banks. Some in social media even interpreted that the 200% penalty is on the income, thus you need to pay more than your income!
Is this completely false? No, there is a small grain of truth in this which makes believing such news even easier. But the fact is, to reach this stage where you have to pay 90% + as taxes, you need to go through a lot of stuff. And in the age of instant news and meme-worthy material, such nuances are always lost. So here is what should happen (in the normal course) to a person depositing excessive amounts of cash:
1. Say Mr A has Rs 1 crore in cash of old currency notes. He has time till 30th December 2016 to deposit the same in banks (extended till 31 March 2017 with additional documentation)
2. As soon as Mr A deposits this money, he needs to have an explanation ready for the source of this cash. Note here the explanation needs to be ready, neither the banks nor the Income Tax will ask for it as of now.
3. So the explanations can be any of the below or a combination of the below options, depending on each case:
a. Mr A’s cash is entirely “white”, on which he has already paid tax i.e. this is cash which has been declared in his books of accounts or he has withdrawn this from the bank. Can there be such cases? Any business which is heavily based on cash for business reasons can surely have such a balance of cash, depending on the day to day volumes.
b. Mr A’s cash is entirely “black”, so to speak, which means he has never paid any taxes on the same.
4. So once Mr A deposits such “white” cash, he has no problems what so ever since he has already paid taxes on the same. He just has to collect evidence of the source and keep it ready.
5. If the cash is “black” though, it becomes “white” as soon as he deposits it into the bank. Thus, now Mr A will have to include this in his annual income, and think of a source for it. Since he has added it to his annual taxable income, he has to pay taxes on that (assumed to be 30% for simplicity).
6. Once he pays the taxes, comes the year end in March 2017. He collates all his financial data, and files an income tax return by July or September 2017 depending on his volume of business etc. Here, he should make sure that the money he deposited is shown in the returns. Please note, in the ordinary course, the Income Tax Department will not bother you even till September 2017.
7. Now since Mr A had huge cash deposits, his transactions would have been reported to the Income Tax Department by the bank. The IT Department will wait till Mr A files his returns, and will probably issue him a notice post September 2017 announcing that they want to scrutinise his books of accounts.
8. This notice will start a series of hearings, proceedings etc where Mr A has to prove things such as where in his tax returns are the cash deposits shown as income, what was the source of income etc.
9. If the officer is not satisfied with his explanations, he can then issue an order which levies a penalty on him. The penalty can be either 50% of tax amount (for under-reporting) or even 200% of tax amount (for mis-reporting) depending on the nature of default. If the officer wants to levy the heavier 200% penalty, the onus lies on the officer to prove that mis-reporting has taken place. Please note by the time this order will be passed, we would be well into 2018.
10. So is the end of the road? No. Mr A can appeal against the decision at multiple levels. He can appeal to the Commissioner (Appeals), the Income Tax Tribunal and even the Courts. Some of the legal means of avoiding penalty are given here.
So to lose 90% plus of your cash deposited in your bank accounts, all the above needs to happen, and as anyone in the industry will tell you, there are many a slip between the cup and the lip. Still, there are some important points to note here:
1. I am not an expert in Income tax assessment proceedings and the above article has been significantly dumbed down for public consumption. If you are in a Mr A type situation, please consult an expert with the exact facts of your case.
2. All of the above holds true in “ordinary course”. The IT Department can at any time decide to change the ordinary course by either taking a more harsh stand and investigating in advance, or a softer stand by framing a policy to let go a class of tax payers mildly.
3. This does not constitute legal advice.
4. Most importantly: Do not take tax advice from WhatsApp forwards.
