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4

Disclaimer: I am not at all knowledgeable on the subject. This is a question based on the reading I've been doing about demonetisation.

One of the objectives of demonetisation was curbing black money or money that tax should be paid on, but isn't. Going in, no one appears to have had an idea of how much black money was in the form of cash. Many people speculated that the money that didn't get deposited in banks would be black money.

I understood this to mean that the RBI had issued 14 lakh crore worth bank notes. Of these, 30% or about 5 lakh crore 1.6 lakh crore [see update below] were estimated to be with various governments, government organizations and banks. That left 9 lakh crore 12.4 lakh crore to recover as deposits in the banks and RBI.

Initially the thought seemed to be that the amount out of the 12.4 lakh crore that didn't return to banks would be black money. Various theories were discussed - whether they could be written off or not, used to recapitalize banks or not... not going there for now. But basic concept was that if - hypothetically - 9 lakh crore got deposited by 30th December (and then 31st March with RBI?), the remaining 3.4 lakh crore would be the black money. Now logically, at least some notes won't return - maybe lost in floods or forgotten in some old purse or whatever. But any significant number (no idea how much that would be) is black money

Yesterday, on the 28th of November 2016, with over a month still left for people to deposit money into banks, the RBI announced that money deposited or exchanged at banks had reached 8.5 lakh crore. This means that thee is supposed to be at the most 0.5 3.9 lakh crore out there. However queues outside banks are still reportedly going strong.

My question is, if, in less than half the time allocated for deposits, we have already recovered most of the notes issued by the RBI, what happens in the remaining duration of slightly more than a month?

Never mind black money. What happens if the notes deposited into banks exceed 0.5 3.9 lakh crore, bringing the total of cash over the 14 lakh crore in notes issued by he RBI? It seems possible, given that the queues are still going strong and that in less than half the time provided, deposits are over 72% of those expected in "ideal" conditions in the full duration provided.

Would that mean that the demonetisation likely converted fake notes into legal money and still found no black money? What would it mean for the liability of the RBI (I haven't fully understood how the liability thing works, but clearly it is a careful balance).

 

What would the implications of something like that be?

 

Update: Sonali Ranade pointed out that some of the 5 lakh crore reported to be with banks and government may have an overlap with money getting deposited in banks. Notes with banks will not, but notes with government organizations like Railways, for example will get deposited in the SBI and be counted again. What this amount is is unclear. Trying to find out.

Update 2: While the money with government and banks was estimated to be at 5 lakh crore, there is a better way of estimating money already with banks alone. An interesting piece by Ira Duggal for Bloomberg-Quint uses RBI reports to arrive at the money in bank chests being Rs. 2.5 lakh crore on the 11th of November. Roughly estimating 86% of this to be in the banned notes, the money in banned notes already with the banks on 11th November would be 2.15 lakh crore. Deduct the 53,000 crore reported by the RBI as deposited within the first 2 days, and you have an estimated 1.62 lakh crore in banned notes with the banks at the start of demonetisation.

24

Last Christmas morning London was surprised to see Eid trending ahead of Christmas in twitter. Later it turned to be the work of an Islamic right wing group. Right wing groups can organize and mobilize far better than others, and the misinformed tend to be militant. In India, communalism and secularism have been extremely politicized to a stage where political parties openly defend riots for electoral engineering. Online, ‘Internet Hindus’ came into being before broadband internet became common. (Still the state with highest internet penetration records only 3% penetration).

While BJP has been trying to project itself as a modern right wing party, its vote base has been what it achieved during Ayodhya movement. Being able to provide an alternative to the Congress helped BJP to grow further. Being unable to reach that separation from the right wing extremists that brought it to power the last two times has left it in a precarious position. Party with a difference became a party with differences. Since the people rejected its divisive communalism after Gujarat riots, it has been hard for BJP to establish its media presence. National media distanced from the Hindutva ideology. Attacks by police on media personnel didn't help matters.

B Raman's observations on BJP strategies to regain its media presence are fascinating. They believed media didn’t give enough space for their ideology (or wanted better coverage anyway). The rise of social media was a new beginning, and the right wing decided to focus much of its energy on consolidating control of social media. Kanchan Gupta is believed to be the ‘chef de mission’ and the one to successfully organize a network for the saffron pariwar. But beyond the agenda, it evolved to a group for pushing Narendra Modi as PM for 2014. A sudden epidemin of anonymous handles appeared in twitter; showering abuse on each and every one whomever they found contradicting their ideology. Dissent was labeled ‘Korrupt Congressi’. Supporters of the party with the majority were dubbed anti-nationals by a party that lost two consecutive elections. Logic stopped mattering. It was a war of dominance.

They created a system of social censorship in twitter using abusive trolling and twitter trend defamation, labeled according to taste. Notable and influential people got attacked. Defaming information was spread about them. Articles against their interest were countered with a series of replies or blogs. Also personal attacks were launched on those writers and those who liked their work. The same people who perfected the art of troubling with defamatory suits perfected the art of abuses to mute opinion. Many accounts were blocked by those who got trolled, only for new handles to be spawned.

They blackmailed the media to fall in with their agenda with a high decibel negative campaign with their mobilized workers. The think-tanks used the mobilized trolls as vectors of the information to spread for the crowd sourcing journalists to win mainstream media presence. Manipulating the initial reaction, deliberate misinterpretation followed by organized mud slinging and derailing debates that were disadvantageous to them were important roles played by this virtual army. This was magnified by innocent people convinced by their campaigns to create a loose knit community of extremist thought that thrives on polarization and has very low analytical skills as a group, usually fed subtle “insights” by leaders. When expressed in 140 characters the truth was missing in trends. As a strategy, this was fairly effective. They used their network to aggravate the negativity of their opposition and alleviate the impacts of its own negativity.

Psywar tactics.

Casual observation over time seemed to point to this agenda:

Media should become resistant to negatives of Modi and his positives must get more coverage in MSM

Create disillusionment and fatigue among netizens with the current political system to a stage, where Modi’s authoritarian style of leadership is accepted by the educated youth. Better still, sold as the “lesser evil” - the only thing that can fix existing problems.

Channelize outrage among people and extract maximum political mileage from it. Impressive organization fuels this with data to support only the view they wish to showcase.

Keep the ideologically opposite liberals under check and systematically silence by creating fear or nuisance to the point of dysfunction.

Another strategy to combat dissent seems to be swarming the target person and overwhelming with many token challenges. They don't stand to scrutiny, but cannot all be answered because of the sheer number – this can then be presented as “having no reply to the truth” - a kind of human DdoS.

Attack political rivals, devalue them in public opinion by making them the brunt of ridicule trends. This became easier because the congress is yet to have a social media cell, though stray people irate with the nuisance or attacks on themselves now seem to be self-organizing. So sometimes you have troll wars 😀

The network has been used for vicious misinformation campaigns that create and sustain communal polarization. Many usually neutral commentators B Raman, Vidyut, Sonali Ranade, Shivam Vij, others openly criticized abusive trolling strategies in social media. Some use wit and facts to combat and turn their methods into an expose of them. Others block or ignore. Tired with trolls, Salil Tripathy sarcastically changed his twitter bio with the labels he received from them
“CryptoMuslim gutter intellectual/Italian Mafia Sepoy/green terrorist+westernized leftist thug+braincell deficit Hindu hater”

Namitha Bhandare wrote a brilliant column on abusive trolls. It spread rapidly on Twitter with enough people frustrated with the trolls. The right wing launched an attack on her which have not stopped yet (check this google result for a snapshot view of the method and madness).

============ guest post by Aby Hydros, edited by Vidyut ==============