India Sentence(s) of the Day

by on December 14, 2016 at 11:52 am in Current Affairs, Economics | Permalink

Praveen Chakravarty writing at Live Mint about India’s Demonetisation for behavioural change:

It was a “shock and awe” action that was originally described as a war against illicit wealth and black money. Over the last several weeks, the narrative has shifted and the demonetisation exercise is now being desperately positioned as a move for India to become a cashless society.

…Let’s be clear, 61% of rural India defecating in the open is a far more serious and significant problem than India’s 12% cash to gross domestic product ratio.

1 Troll me December 14, 2016 at 12:19 pm

Considering the proclivity for incompetent and overbearing micromanagement in Indian bureaucracy, combined with widespread cartelism, graft and other problem throughout public and private sectors …

India seems like an especially likely place to fulfill fears of what abuses of freedom and humanity might accompany a cashless society.

Anyways, Indians, even the uneducated and hungry ones who get low scores on standardized tests that have precisely zero bearing on opportunities in their lives, are not dumb. Go cashless, and this will spell the end of fiat currency in India. It is both my hope and prediction. (Anonymous fiat currency would be better.)

2 Troll me December 14, 2016 at 12:25 pm

Anyone got an app for managing laundry-detergent-dollar networks?

Laundry detergent is a good store of value. Just a bit of a pain the butt to move from one place to another.

Maybe we’ll need an app to manage relative price changes resulting from local supply and demand of detergents, cooking oils, and other things that will always be useful.

Technically speaking, a cashless society only seems like a good idea if completely ignoring costs and especially risks associated with going down that road.

if you can’t cut the graft in local construction projects, what hope is there that Indian democracy could ever get a handle if this starts to go in the wrong direction?

Might I add that India has also recently instituted a biometric system for welfare cash disbursements.

Over/under on India being more free in 10 years?

3 8 December 14, 2016 at 12:49 pm

Fascist India takes DNA samples of all citizens in order to find the street poopers. The technology and companies already exist.

4 Cliff December 14, 2016 at 4:21 pm

Seems like a cashless society would greatly help with the graft and corruption

5 Cliff December 14, 2016 at 4:28 pm

Depending on the practicality of giving gifts instead, I guess.

6 Adam December 14, 2016 at 8:29 pm

I’m sure the corrupt officials will never think to demand bribes in dollars or euros or gold or jewelry.

7 Cliff December 15, 2016 at 1:28 am

Yes. I don’t know what the availability of such items is in rural India.

8 Troll me December 15, 2016 at 12:45 am

Unless it is used to monitor and attempt to destroy the people who report on graft and corruption.

9 Adrian Ratnapala December 14, 2016 at 12:21 pm

This precedent would indeed inducebehavioural change inme. I would hurry up and buy some gold and bitcoins.

10 chuck martel December 14, 2016 at 12:32 pm

A cashless society means administration by either the state or subsidiary banks. How many Indians have bank accounts? Or magic phones? Or any phone at all? What’s happening in India, if it can be pulled off, is a giant step forward for the super state. Every other state is watching carefully and analyzing, hoping to avoid the mistakes the Indians are sure to make, so they can implement the process themselves.

11 RW Force December 14, 2016 at 2:59 pm
12 zbicyclist December 15, 2016 at 7:41 am

According to what I heard on BBC’s “More or Less” recently, 27% of Indians have phones that can connect to the Internet. (that’s not exactly what you asked).

13 Tully December 14, 2016 at 12:46 pm

India is just another massive, tragic example of always failed socialism and always corrupt statism
Soft Democracy there did not rescue the impoverished masses

What economic system has been fabulously successful in lifting great masses of humans from poverty?

14 Ray Lopez December 14, 2016 at 1:14 pm

“Let’s be clear, 61% of rural India defecating in the open is a far more serious and significant problem than India’s 12% cash to gross domestic product ratio.” – what’s wrong with public defecation? I recall reading that the common domestic fly, Musca Domestica, has a bad reputation that’s not warranted. You see, traditionally the ancient Indians left their dead out in the open to be eaten by vultures and consumed by flies. If the fly was that deadly, then likely in ancient times the entire population of humans would have been wiped out. So to a degree the fly is overrated as a disease vector. File this one under “Medical Myths Debunked” like the fact about how soapy hot water is no different in cleaning hands than soapy cold water, and it’s the paper towel that’s as effective as the soap in cleaning dirty hands.

15 Ray Lopez December 14, 2016 at 1:17 pm

Recall as anecdotal evidence those Middle East meat markets where the flies cover the raw meat for sale with tiny eggs to such a degree that the meat looks like it has a dusting of while powder on it. If flies were that deadly, all the people in those market would have been wiped out by disease.

BTW, Venezuela also is abolishing their high-denomination Bolivar note this week…

16 Dzhaughn December 14, 2016 at 2:57 pm

Paradise awaits you.

17 msgkings December 14, 2016 at 4:41 pm

With these insights on hygiene and cleanliness I’m surprised some gal hasn’t snapped you up yet and had a million babies with you.

18 carlospln December 14, 2016 at 10:18 pm

Yeah, I guess Ray skipped the chapter in the history book about clean water & reticulated sewerage saving more lives than any other technology in the history of civilisation.

Norovirus, Ray? https://en.wikipedia.org/wiki/Norovirus

19 Anonymous December 14, 2016 at 1:24 pm

It is only the Parsees that do this as a death ritual and they area very small minority in India.
https://en.wikipedia.org/wiki/Tower_of_Silence

20 MOFO December 14, 2016 at 1:26 pm

“You see, traditionally the ancient Indians left their dead out in the open to be eaten by vultures and consumed by flies. If the fly was that deadly, then likely in ancient times the entire population of humans would have been wiped out.”

Perhaps you have not heard, but disease was a pretty big deal in ancient times.

21 CVAli Choudhury December 14, 2016 at 1:27 pm

Flies are immensely irritating and need to be eradicated on that basis alone.

22 Jay December 14, 2016 at 1:54 pm

Democrats have no problem displaying their bulls*** in public in the US on a regular basis. What is the problem with public defecation again?

23 msgkings December 14, 2016 at 4:40 pm

Ha ha, take that stupid Democrats!

24 Cliff December 14, 2016 at 4:24 pm

“what’s wrong with public defecation?”

Spread of parasites and disease

25 Troll me December 15, 2016 at 12:58 am

Especially because it sits on the surface, and any rain can carry the parasites and disease into nearby sources of water.

26 Benny Lava December 14, 2016 at 1:50 pm

Chinese communism. Not the answer you were looking for but well, sadly it works.

27 Cliff December 14, 2016 at 4:25 pm

Ah, and what is the difference between Chinese Communism in the ’60’s and Chinese Communism in the ’90’s?

28 JWatts December 14, 2016 at 4:27 pm

Yes, it does look as if the success of China has been inversely correlated with it’s level of Socialism.

29 Troll me December 15, 2016 at 2:46 am

Starting with isolated experiments with “household responsibility systems” (household level management of farming plots rather than commune-level management) which soon after were replicated throughout the country, and then with the rise of “town and village enterprises” which saw entire towns and villages become specialists in the production of specific goods with potential for export.

30 Peter Schaeffer December 15, 2016 at 3:45 pm

Cliff,

‘Ah, and what is the difference between Chinese Communism in the ’60’s and Chinese Communism in the ’90’s?’

Mao/Gang of Four vs. Deng Xiaoping and Jiang Zemin. Of course, the real transition was from “better red than expert” to “To get rich is glorious”

31 Peter Schaeffer December 14, 2016 at 7:01 pm

BL,

Chinese communism would have been my answer as well. But only after the death of Mao and the downfall of the Gang of Four. When Mao and the Gang of Four ruled China, China suffered from the greatest famine in world history and the disaster of the “Great Leap Forwards”. Ever since China adopted capitalism, progress has been overwhelming. Of course, China has combined market incentives with one-party rule. That combination appears to be the most successful in history and may well be what “Tully” had in mind.

32 Thiago Ribeiro December 14, 2016 at 8:53 pm

Chinese dictatorship/crony capitalism/Communist Party rule

33 Ali Choudhury December 14, 2016 at 1:26 pm

This has been quite the own goal. Who is Modi getting advice from?

34 collin December 14, 2016 at 2:17 pm

It hits me that Indian appears to be skipping the US growth of 1920 – 1980 Industrialization (or China crowded them out?), where the society is either half of modern IT/office cities and half of rural subsistence agricultural lifestyle. Little in between so that is one half wants a modern nearly cashless society versus half the people without indoor plumbing.

35 derek December 14, 2016 at 2:52 pm

Where is the desperation from? Were the bank runs and panics not part of the plan?

Black and grey market economies are the result of government policies, on the ground as applied. If you want to change that, change the government policies and those who implement them.

If you had no where to sh*t, no infrastructure, why would you pay taxes to the blithering fools who wasted the last dollar you sent them?

36 Dzhaughn December 14, 2016 at 2:59 pm

Perhaps they were part of the plan, but were not part of the planned explanation of the plan.

37 derek December 14, 2016 at 5:33 pm

I must say I’m dumbfounded by the blithering stupidity of whoever tried this stunt. I understand what they were trying to do, but obviously it was better to fuck over huge numbers of people rather than try to muck out a few layers of local politician/bureaucrat silliness and corruption.

They will be lucky they come out with their heads attached.

38 Troll me December 15, 2016 at 1:04 am

Countries with that level of infrastructure don’t generally have functioning systems for formalization of markets in the areas of labour and property markets relevant to things like open defecation.

So, the people doing open defecation probably don’t pay any taxes that they are explicitly aware of and wouldn’t think of it that way.

Often, the situation coincides with one where control over borders enables one of the main sources of revenues – in which case, there is unlikely to be much resources left for sanitation after taking care of … upholding borders, basic basic road, electric, communications and other such infrastructure, in addition to some basic health and education provisions.

Despite not paying taxes that they are aware of, it seems that a lot of such people are still very strongly of the opinion that with power comes responsibility, so it is not unknown for them to demand services beyond their up front payment of taxes. Fortunately for them, there are a lot of good economic development reasons to provide services that they want. But unfortunately for them, they are still probably in a country which simply does not have human or financial capital to deliver them, at least not right away.

39 Edgar December 14, 2016 at 3:29 pm

The 61% figure cited appears inflated, is debatable, and is tellingly unsourced. India under Modi has put tremendous effort into solving this problem. The Swachhta Status Report of the National Sample Survey Office for 2016 reported that “In rural areas, 55.4% households contributed to open defecation. This percentage in urban areas was 8.9%.” (see page ii at: http://sanitation.indiawaterportal.org/sites/default/files/attachment/Swachhta%20Status%20Report-2016.pdf). For more see: http://www.thehindu.com/data/What-numbers-tell-us-about-Open-Defecation-in-India/article15422326.ece

40 Unanimous December 14, 2016 at 4:22 pm

So it’s 55% not 61%. Doesn’t really change the point.

41 Cliff December 14, 2016 at 4:26 pm

What was the point exactly? You must start with the worst problem and only move on to the nest-worst problem once that problem is solved?

42 Edgar December 14, 2016 at 6:21 pm

That exaggeration makes me wonder how much the costs of demonetization are exaggerated. All this short term hysteria may look foolish in a few months. Maybe not the best policy move ever, but not nearly so awful as Praveen Chakravarty paints it. I think Amitabh Suryakiran Tiwari is correct in saying we will need to look at the long term outcomes before making any judgments.
http://www.oyetimes.com/news/india/144187-demonetization-india-success-not

43 Harun December 14, 2016 at 7:48 pm

6% difference in a survey result. Yeah really exaggerated.

44 Aj December 14, 2016 at 8:51 pm

55% is for rural. Given the numbers for rural and urban areas and the rural to urban population ratio of 2:1, overall percentage for India works out to 39%, which is much lesser than 61%. Here i was thinking only intelligent people read this page.

45 Edgar December 14, 2016 at 9:49 pm

Alex posting writers who put Modi into the worse possible light is consistent with his history of Modi-bashing. One wonders about the true reasons for his upcoming semester abroad. Is he there to teach? Or to work with the opposition to sabotage the BJP? Certainly he is past the point of actually being able to learn anything since all he is willing to see is that which confirms his biases. In any event, I would not be surprised to see him arrested for espionage in the coming months.

46 Cliff December 15, 2016 at 1:30 am

Aj, it specifically says the % is for rural India

47 TallDave December 16, 2016 at 12:12 am

…Let’s be clear, 61% of rural India defecating in the open is a far more serious and significant problem

Really hard to build strong local institutions in India. Not going to get there by driving the black market into the open at gunpoint, need to coax them out of the shadows by demonstrating trustworthiness, competence, impartiality and a commitment to property rights. Very hard to get any group of people there.

48 blah December 15, 2016 at 12:34 am

@Edgar: I think one should give benefit of doubt to Alex here:

1. There are several nationalists who are really alarmed by demonetization too.

2. In the past Alex has frequently written positive stuff about India, unlike someone else, a very smart fellow, who overwhelmingly points to only negative stuff about India, or some of the commentators here who go to the extent of making racist stereotypes about Indians.

49 Dzhaughn December 14, 2016 at 9:36 pm

“Contributed” seems vague about how much and how often they contributed.

50 Chuck December 14, 2016 at 4:53 pm
51 GoneWithTheWind December 14, 2016 at 3:51 pm

There is only one reason for any country to become a “cashless society” and that is to further government control of the people.

52 JWatts December 14, 2016 at 4:30 pm

Well India might well become a “less cash” society by increasing the use of gold and bitcoins.

53 Unanimous December 14, 2016 at 4:46 pm

There are many reasons, the biggest of which is the reason cards were introduced in the first place – they are good for business because they encourage people to spend more.

54 Bill December 14, 2016 at 5:13 pm

Damn those Standard and Poor

“Indian banks and companies face short-term downside risks due to the cash crunch arising from the government’s decision to invalidate old high-value currency notes, but the move will be beneficial for the Indian economy in the long run, global rating agency S&P said on Wednesday.

“Indian government reforms will have long-term structural benefits but carry short-term execution and adjustment risks,” S&P Global Ratings credit analyst Abhishek Dangra said in an article titled India’s Demonetization And The GST: Short-Term Pain For Long-Term Gain.”
http://www.livemint.com/Industry/RGqjsCKQEeUhNP5lY9aD8I/Demonetisation-GST-rollout-will-help-Indian-economy-in-the.html

55 Troll me December 15, 2016 at 1:13 am

What would happen to the world’s forests if India started using toilet paper?

Anyways, what I’ve seen of efforts to promote increased access to sanitation in India, it seems like toilet manufacturers must be heavily involved.

Because they seem very focused on “access to a toilet”, far more so than practical sanitation standards that actually form the basis of the public health benefit. The king’s toilet and a hole in the floor are equivalent for public sanitation purposes. It’s what happens after that that matters.

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