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Dangal Box Office Collection Day 3: Aamir Khan’s Film Made Over Rs 100 Crore In First Weekend

Dangal Box Office Collection Day 3: Aamir Khan’s Film Made Over Rs 100 Crore In First Weekend
Dangal Box Office Collection Day 3: Rs 42.35 crore on Sunday bring the total to Rs 106 crores

HIGHLIGHTS
Aamir Khan’s film made Rs 42 crore on Sunday aloneDangal’s Sunday figures are the highest ever for a single dayDangal is directed by Nitesh Tiwari

Dangal Box Office Collection Day 3: Aamir’s film broke the record for highest single day earnings
Aamir Khan’s Dangal, which released on Friday, has collected above Rs 100 crores in its weekend, report trade analysts. Dangal’s collections rose substantially day-wise and over the weekend, box office receipts totalled up to Rs 106.95 crore in India. The film released in Hindi, Tamil and Telugu and the collection is from all three languages. Aamir’s tryst with Christmas has been successful yet again after Ghajini (2008), 3 Idiots (2009), Dhoom: 3 (2013) and PK (2014). On Monday, trade analyst Taran Adarsh tweeted: “Dangal hits century, crosses Rs 100 crore mark. Suday’s business was humongous. Smashing records and setting new benchmarks.”

As predicted by trade pundits, records have been broken. Dangal’s Sunday collection alone was Rs 42.35 crore, which is reportedly the biggest single day collection of any film. Salman Khan’s Sultan held the previous record at Rs 39 crores.

Aamir Khan’s Dangal is a biopic of wrestler Mahavir Singh Phogat, who hoped to win gold for India. He coached his daughters Geeta and Babita in the sport against all odds and finally Geeta fulfilled Mahavir Phogat’s dream in the 2010 Commonwealth Games.

Dangalopened to fabulous reviews and top ratings on December 23. Film critics, movie-goers and Aamir’s colleagues unanimously agree that Dangal is Aamir’s career’s #1 film.

The Nitesh Tiwari-directed Dangal stars Fatima Sana Shaikh and Sanya Malhotra as Geeta and Babita Phogat while television star Sakshi Tanwar plays Mahavir Phogat’s wife Daya.

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Beyond Dangal reviews: Decoding Aamir Khan’s success formula

Beyond Dangal reviews: Decoding Aamir Khan’s success formula
Call him sanctimonious saint, India’s conscience keeper, Mr Perfectionist or ruthless media strategist, the truth is Aamir Khan is a risk-taker who has discovered a magic formula for box-office gold. Dangal is yet another proof.

This week’s big release, Dangal revolves around female wrestling but its commercial prospects hinge entirely on its male star Aamir Khan’s broad – maybe not so broad after all, what with all the extra beef on the bone gone – shoulders. Aamir’s reputation as ruthless media strategist is an open secret.

Dangal movie review

Whether an over-bloated foil in a film (CC: Taare Zameen Par and Dhobi Ghat) or an item song eye-candy (Delhi Belly), he overshadows everyone in media outreach. Even in a Raju Hirani film, Aamir Khan is Raju Hirani. An Aamir film may not always belong to Aamir but is still pitched as an Aamir Khan vehicle. As anyone even remotely familiar with Hindi cinema would know, contrary to other stars who are on media radar 24/7 Aamir gets active on the limelight circuit barely weeks before the crucial release and withdraws in short order once he has ensured the film’s dash to the 300 crore-dom. It is this absence between the films that feeds and sustains the audience’s interest in Aamir.

Of the three Khans, including Shah Rukh and Salman Khan who have ruled Bollywood for more than two decades, Aamir is physically unremarkable (though he retains his youthful boyishness) and the least star-like. When Salman walks into a room, he once remarked, heads turn. “I lack that star quality,” he admitted, sounding genuinely self-deprecatory than ironical. It is why you’ll always find a throng of SRK-stalkers outside Mannat, the superstar’s palatial mansion in suburban Mumbai and fans who stand for hours in the heat outside Galaxy Apartment to get a glimpse of Salman Khan but with Aamir, you’ll struggle to even locate his home on a fanzine map – forget mobbing his building. Why is it like this when, in fact, the Khan triumvirate are bona fide A-listers in their own right? The truth is, the Khans occupy different slots in the audience’s mind space. They represent different aspects of the Indian desire machine. What people want in SRK and Salman is different from what they expect from Aamir. SRK exists to fulfil their romantic fantasies. Salman has a Peter Pan appeal –a bad boy with golden heart, a misunderstood man-child whose transgressions are eventually forgotten and forgiven by a motherly India.
Aamir, on the other hand, speaks to our minds. If SRK has made a career out of playing SRK, Aamir has made a career out of playing on-Aamir Khan. Over the years, he has distanced himself from the other Khans and built a legacy as a discerning man’s superstar. He’s an every-man, not a star. What sets him further apart from other stars is that when you watch a film starring him, you come back intrigued not of his performance or starry aura but of the singular power of the story. (Though, as we go into print, critics are raving about his performance calling it significant and extraordinary.) With Aamir, you get a feeling that every Bollywood film would be slightly tolerable if he was in it and it may be so not because of his acting or performance but due to his overall involvement.

Many are expecting the eagerly-awaited Dangal to be a monster hit. It is Aamir’s return to the screen after a gap of two years. His last, PK, was a controversial blockbuster but left the critics wanting for more. Based on the first family of Indian wrestling, the Phogats, Dangal, his latest film features a lesser-known star cast and is in line with themes we have come to associate Aamir with in recent years. Relevant storylines, edgier ideas, fresh cast and lesser-known directors. The star reveals a talent for plucking stories that are either topical or have the capacity to become a conversation-starter. Ever since the film’s trailer was released, comparisons with Salman Khan’s Sultanbecame inevitable. Both films are about wrestling set in a Haryanvi milieu. But being an Aamir Khan film, Dangal obviously looks credibly well-researched and more realistic than the masala Sultan.
Aamir, who can work with any director he desires, has a tendency to hire filmmakers no one has heard of. Dangal is directed by Nitesh Tiwari, an award winning but little-known filmmaker whose previous credits read such smaller films as Chillar Party and Bhoothnath Returns. Another trend established over the years is that he never works with a director twice, except Raju Hirani. This adds to a growing perception that he ghost-directs his films. Which self-respecting filmmaker would want to work with an obsessive star whose involvement in the film is – as rumours go – like that of an absolute monarch?

Talking admiringly of Aamir to Tehelka magazine a few years ago, the usually caustic Naseeruddin Shah noted, “Aamir is the only star I can think of who is not producing films only to make money. And the same directors have fallen flat when they have attempted similar films without him. That says a lot about him.” One part of Shah’s statement rings true but the other is wide off the mark. Commercial success matters to Aamir, just as much as critical hosannas. The box-office has been kinder to him than most stars because of his promise of something new each time he returns to the marquee. Unlike Salman Khan whose glory run at the box-office is a recent phenomenon, Aamir has been a consistently successful star for years. Highly competitive, he tops the numbers race.
Call it competitiveness or insecurity, Aamir rarely shares screen space with another Khan or a Kumar. In Dangal, he has once again teamed up with an ensemble of small-time actors who appear in key roles. If it’s in the interest of the film, he even lets them steal his thunder. Think: Rang De Basanti, his biggest cultural moment. How he stepped back and allowed Siddharth to deliver the climax. Or, Satyamev Jayate, his apology for corporate social responsibility, which put journalism and social issues at the forefront with AK as the maudlin host taking a backseat.

From his media interviews, Aamir emerges as a man whose mind works like a filmmaker or scriptwriter. He speaks repeatedly of the need for simplicity in storytelling. In the Fat to Fit promotional video for Dangal, he said he didn’t want to wear prosthetics to look fat because, “maza nahin aayega.” No interview of Aamir is complete without him using the term ‘maza’ (entertainment) as a point of reference. It is tempting to wonder if his understanding of ‘what is entertainment’ owes in part to his influential uncle Nasir Hussain, the maker of such frothy money-spinners as Dil Deke Dekho, Caravan and Yaadon Ki Baraat.

Mr Hussain was committed to the service of entertainment. Aamir is following in his footsteps. At least in the last decade, Aamir’s dedication towards turning boring subjects into something interesting and engaging for the masses has become his signature. Who would have thought a satire on education (3 Idiots) would become one of the highest grossing Hindi hits of all time? He takes an underground film like Delhi Belly and turns it into box-office gold. Look at some of the subjects he has tackled as an actor, producer and director in recent years – media circus over farmer suicides in Peepli [Live], a complex, intersecting narrative set in Mumbai (Dhobi Ghat), dyslexia in children (Taare Zameen Par) and Bombay noir (Talaash). Aamir makes “social issues” entertaining to watch. Those who know the 51-year-old star say he trusts his instincts above everything else. Several media reports call him a risk-taker who is equally smart at reading the pulse of the audience. Is this magical connect with the audience the secret to his success? One guess could be that Aamir is the First Audience of his films and it is in this ability to put himself in place of the viewer that helps him strike a chord with moviegoers. The other guess, though, is simpler. That he makes movies only to make them a hit.

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ED raids Axis Bank’s Ahmedabad branch, detects Rs 89 cr worth illegal transactions

ED raids Axis Bank’s Ahmedabad branch, detects Rs 89 cr worth illegal transactions

There seems to be no end in sight to the woes of private sector Axis Bank. According to a report in India Today, the bank’s Ahmedabad branch has now been raided and the Enforcement Directorate (ED) has put transactions worth Rs 89 crore under scanner.
The raid was conducted at Mayamnagar branch of the bank and the ED scrutinised 19 accounts, the report said.Axis Bank logo. ReutersAxis Bank logo. Reuters
According to I-T officials quoted in the report, these accounts, which allegedly have lax KYC compliance, saw Rs 89 crore worth of investment after the demonetisation announcement, and the amount was later transferred to beneficiary accounts. Four bank officials are also under the scanner, said the report.
The bank had been in the news in the last few days after authorities found certain branches had opened fake accounts to help tax cheats to launder their ill-gotten wealth.The ED has already registered a money laundering case in the alleged forging of a customer’s identity to conduct huge illegal transactions in the branch of Noida for conversion of black money into white post demonetisation.
The individual, identified as N Paswan, in his complaint filed with the police has claimed that his identity has been forged and a current and a savings account was opened in his name in the said branch which was allegedly used to launder crores of rupees post demonetisation.The bank branch, in sector 51 of Noida, is also under scanner of the income tax department owing to alleged dubious transactions using shell companies.
In the Noida case, the ED probe involves a laundering of Rs 60 crore. The officials of the agency had told PTI that they are probing more than two dozen accounts in the bank there which could have been used to perpetrate the crime of money laundering.
The bank, according to a PTI report, had suspended 24 employees and 50 accounts after the I-T raids unearthed such illegal activities.
“We are embarrassed that this has happened, but these are isolated incidents given that we have more than 3,000 branches and 50,000 employees.We have had many of our customers writing to us that the bank has done a great job and, therefore, it is disappointing that a handful of people have let us down,” MD and CEO Shikha Sharma had told The Economic Times in an earlier interview.

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It’s now ‘Reverse Bank of India’; Twiteratti weighs in on RBI’s latest rule

It’s now ‘Reverse Bank of India’; Twiteratti weighs in on RBI’s latest rule

RBI’s directive also came under heavy criticism from the Congress vice-president Rahul Gandhi, who tweeted “RBI is changing rules like the PM changes his clothes”.
It has been 43 days since Prime Minister Narendra Modi announced the demonetisation of high-value currency notes of old Rs 500 and Rs 1,000. Within this period of time, people across the country have largely spent their time standing in the never-ending bank and ATM queues to withdraw their own hard-earned money. As if the situation was not miserable already, the RBI also seems to have been on a norm-changing spree, with its new rules and the rollbacks on demonetisation coming up almost every day.
The Congress, which was in staunch opposition of the government’s decision, criticised the central bank for “changing the norms 126 times” since Prime Minister Narendra Modi announced the scrapping of the old currency notes on November 8. So much so, that the party called the apex bank the “Reverse Bank of India”. This outburst comes at the heels of RBI withdrawing its Rs 5,000 cash deposit limit for KYC-compliant accounts.
See what else is going viral
RBI had previously announced that all deposits exceeding Rs 5,000 cash deposit limit will be scrutinised. It said that the depositors will have to give a satisfactory explanation as to why they couldn’t debit the money earlier. The unprecedented changes that the RBI is bringing at such a rate has got the Twitterati talking and they seem to be mincing no words!

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Cash Deposit Rules Tightened Days Before Deadline

Cash Deposit Rules Tightened Days Before Deadline
Customers with amounts above that level had to provide an identification number known as the permanent account number.
Mumbai: The Reserve Bank of India tightened cash deposit rules on Monday, just days before the demonetisation deadline, saying individuals can bank over Rs 5,000 ($73.83) of old notes only once until December 30 if they provide a satisfactory reason.

Under the ongoing demonetisation scheme announced by the government, the public were allowed to deposit up to a total of Rs 2,50,000 of old currency notes with banks till December 30. Customers with amounts above that level had to provide an identification number known as the permanent account number.
However, the RBI in a circular said that any deposit above Rs 5,000 would be subject to questioning by two bank officials and the explanation should be kept on-record in case of scrutiny at a later stage.

The timing and the low threshold of the cap raised questions about the intention behind such a move as Rs 12.44 lakh crore ($183.67 billion) which is more than 80 per cent of the abolished cash has already been deposited with banks.

“Possibly the reason is to prevent any large scale money laundering towards the end of the scheme,” said Soumya Kanti Ghosh, chief economist at the State Bank of India.

It could also mean that the Reserve Bank of India is unlikely to extend the deadline beyond the end of the month, analysts said.

($1 = Rs 67.7250)© Thomson Reuters 2016

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Govt Asks Tax Evaders to Come Clean by March 2017; You Can Mail Tip-offs

Govt Asks Tax Evaders to Come Clean by March 2017; You Can Mail Tip-offs

New Delhi: Offering one last chance to black money holders, the government on Friday said they have time until March-end to come clean by paying 50 per cent tax on bank deposits of junk currencies made post demonetisation.Offering tax dodgers confidentially and immunity from prosecution under the new tax evasion amnesty scheme PMGKY, which kicks-in from Saturday, Revenue Secretary Hasmukh Adhia said non-disclosure of deposits made in banks after the Rs 500 and Rs 1000 notes were junked will attract stiffer penalties as well as prosecution.
Not declaring the black money under the scheme now but showing it as income in the tax return form would lead to a total levy of 77.25 per cent in taxes and penalty. In case the disclosure is not made either using the scheme or in return, a further 10 per cent penalty on tax will be levied followed by prosecution, he said.
The disclosure scheme is part of The Taxation Laws (Second Amendment) Act, 2016, which was approved by the Lok Sabha earlier this month and has been assented by the President.
The Pradhan Mantri Garib Kalyan Yojana (PMGKY) will commence on December 17 and shall remain open for declarations up to March 31, Adhia told reporters here.
“Beginning tomorrow most of the banks will have challans to be filled for depositing tax for availing the PMGKY scheme. Only after payment of 50 per cent tax and setting aside the 25 per cent of the remaining undisclosed amount for 4 year, a person can avail the PMGKY scheme,” he said.

Adhia emphasised that mere depositing of cash in banks will not convert black money into white. Taxes have to be paid.
As per the scheme, taxes will have to be paid first and then the scheme can be availed on production of tax receipt, unlike the recent Income Disclosure Scheme and other such plans wherein disclosures were made first and taxes were recovered later.Also, as the disclosures will be kept confidential, the holder of unaccounted cash need not disclose it in Income Tax Returns forms.
To get information on money launderers, the tax department has created a special email address where anyone can provide information about them.
“People who have knowledge of money launderers can give direct information to us. We have created a email id: blackmoneyinfo@incometax.gov.in (for the purpose),” he said.After the shock November 8 demonetisation announcement, the government allowed the junked Rs 500 and Rs 1000 notes to be deposited in bank accounts.

For those holding unaccounted cash, it offered new tax evasion amnesty scheme wherein 50 per cent tax will be charged on declarations and quarter of the total sum be parked in a non-interest bearing deposit for four years.
With the help of professional agencies, a thorough analysis of all deposits that come till December 30 will be done to try and join all the dots, he said, adding that raids conducted so far are based on information analysis.
“Mere depositing of money in bank account does not make it white. People should not make the mistake of thinking cash deposited in bank is white,” he said.

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NRI can skip paying 22.66% Tax U/S 195 while selling properties in India

NRI can skip paying 22.66% Tax U/S 195 while selling properties in India

NRI can skip paying tax

In this post we will understand how my NRI friends can lower the TDS on Property Sale. Before you decide to go ahead with property sale following 2 points should be considered

1. Type of Capital Gain from Property Sale i.e. Short Term Capital Gain or Long Term Capital Gain

2. Whether i am willing to pay capital gain tax or would like to save capital gain tax by Re-investment of capital gains

Once these 2 points are clear then we are ready for property sale in India. Let’s discuss the case of Mr. Ashok Taneja (with his due permission) who lives in California. He has property in Delhi which he bought in Aug, 2009 for 70 lakhs. He approached me for consultation on TDS on property sale by NRI’s. He is planning to sell it in current FY 2014-15 for 1.5 Cr. Now in his case, the answer to above mentioned 2 points are
1. Capital Gain will be Long Term Capital Gain as Mr. Taneja held the property for more than 36 months. Rate of Capital Gain Tax for Long Term Capital Gain is 22.66%

2. Mr. Taneja is inclined to save capital gain tax by re-investment of capital gains

Therefore 1st task is to calculate long term capital gain of Mr. Taneja. Indexed cost of acquisition of property is approx 1.13 Cr and he is selling it for 1.5 Cr. Long Term Capital Gain from property sale is approx 37 lakhs and corresponding Long Term Capital Gain Tax at 22.66% is 8.38 Lakh.
As i shared in my previous post that there is anomaly in law. If in case of Mr. Taneja, buyer deduct TDS at 20.66% u/s 195 then TDS will be deducted on sale consideration value i.e. 1.5 Cr. TDS u/s 195 will be approx 31 Lakh against Mr Taneja’s Long Term Capital Gain Tax liability of 8.38 Lakh. In short, u/s 195 excess TDS to the extent of 22.62 lakh will be deducted assuming Mr Taneja decided not to re-invest capital gains from property sale.
After point 1 i.e. calculation of capital gain, there are 3 possible scenarios

(a) Capital Gain is Zero or there is Capital Loss on Property Sale: In this case NRI Seller can apply for NIL Tax Deduction Certificate.

(b) NRI Seller is willing to pay Actual Capital Gain Tax i.e. if Actual Capital Gain Tax liability is less than TDS u/s 195: In this scenario, based on capital gain tax calculation NRI seller can apply for Lower tax Deduction Certificate. In above example, Mr. Taneja can apply for Lower Tax Deduction Certificate as actual long term capital gain tax liability is only 8.38 lakh against TDS of 31 lakh u/s 195.

(c) NRI seller is willing to re-invest capital gain to save capital gain tax: In this case, NRI Seller can apply for Tax Exemption Certificate.

How to apply for Nil / Lower Tax Deduction Certificate or Tax Exemption Certificate on Property Sale
NRI Seller can apply for Nil Tax Deduction or Lower Tax Deduction with Income Tax Assessing Office. In case, NRI seller is planning to re-invest capital gain as i mentioned earlier then he can apply for tax exemption certificate. Based on assessment by Income Tax Department, certificate will be issued to NRI seller for property sale. In this case, buyer will not deduct TDS u/s 195 on sale consideration value. In above example, if Mr Taneja get certificate from Income Tax Department then buyer will pay full consideration i.e. 1.5 Cr to Mr. Taneja without deducting TDS. NRI seller can handover original Nil Deduction Certificate to the buyer for his reference. In short, buyer need not to file any TDS in seller’s name as TDS will not be deducted in this case. Income Tax Department will issue separate certificate to NRI seller for TDS on capital gains. For Tax Exemption Certificate, NRI seller can submit application in Income Tax Department under whose jurisdiction his / her PAN belongs to.

In few cases i observed that TDS is not applicable on property sale as NRI seller obtained NIL Deduction or Tax exemption certificate but then buyer deducted TDS u/s 194IA just for the sake of deducting TDS. In such cases, full payment should be released to NRI seller for property sale and buyer should obtain Nil deduction certificate / Tax Exemption Certificate from NRI seller.
Documents Required: Income tax department may ask for following documents to issue Nil / Lower Tax Deduction or Tax Exemption certificate

(a) Passport
(b) PAN
(c) Sale Agreement / Sale Deed
(d) Income Tax Returns
(e) Bank Statement
(f) Any other document deemed relevant
Entire process may take upto 1 month’s time and it is advisable to hire a professional for this job.
In case, there is no tax liability then NRI can file form 15CA and 15CB online. These forms can be filed by CA. After filing form 15CA and 15CB, money can be transferred to country of residence else money can be retained in NRO account in India. Repatriation of funds during FY should not exceed $ 1 Mn
NRI’s and PIO’s can repatriate sale proceeds of property inherited from resident Indian without RBI’s permission subject to certain conditions. General Permission is available for repatriation of sale proceeds from inherited property. Documents required are Inheritance Certificate / Succession Certificate or Probate and a certificate from Chartered Accountant in specific format.

Word of Caution:
1. Please check income tax rules in your country of residence on capital gain out of property sale in India.

2. Please check income tax rules related to long term capital gain exemption under section 54/54F/54EC in your country of residence.
3. Please check whether DTAA (Double Taxation Avoidance Agreements) is signed between India and your country of residence.

4. Last but not the least, in many cases i observed that NRI seller insist buyer to not to deduct TDS. In specific cases, TDS is not deducted due to ignorance at buyers end. In all such scenarios, hefty penalty can be imposed on buyer or on NRI seller. It is always advisable to pay all taxes on time to buy peace of mind which is priceless.
Hope my NRI friends liked the post. You can share this post with your friends and family members through following social media icons.

In my next post, i will discuss how buyers can deduct TDS u/s 195 if they are buying a property from NRI i.e. Property Sale by NRI.

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India’s New Bank Notes Already Being Used For Corruption: Foreign Media

India’s New Bank Notes Already Being Used For Corruption: Foreign Media

NEW DELHI:On Nov. 8 – the same day American politics was upended – India’s prime minister announced the sudden invalidation of all high denomination currency notes, accounting for a whopping 86 percent of the country’s cash. Demonetisation, as it is referred to here, has thrown Indians rich and poor into a protracted state of confusion and frustration.
The move’s primary intention has been to catch tax evaders. A significant portion of India’s cash is ill-gotten or undeclared, and it passes hands in an extensive shadow economy that goes untaxed. Invalidating 500 and 1,000 rupee notes meant that all Indians, including those hoarding large amounts of cash, would have to exchange those notes for new ones at a bank. In the process, official thinking went, all cash would become accounted for, and those who had been evading taxes would either have to stomach huge losses or declare their assets and pay major penalties.
For the plan to work, however, it had to be done in secret. Otherwise, those in possession of India’s “black money” could have converted it into noncash assets such as gold and avoided detection. That secrecy meant that the minting of new notes – new 500s, and 2,000s instead of 1,000s – could not happen in earnest until well after the invalidation was announced, lest a whiff of the change seep out. At current rates of printing, analysts say it may take three more months, if not double that, to restore the economy to its previous level of liquidity.

As such, India is now in the throes of a major cash shortage. People are spending hours in those lines, often to find out that cash has run out before their turn. That’s not to mention entire sectors of the economy – including segments of agriculture and even manufacturing – that are entirely cash-driven and have gone through major slowdowns because of the shortage.

For the first few weeks of demonetization, it was common to meet Indians who felt that their collective suffering and inconvenience was justified because it would ultimately usher in a less corrupt, more equal India. But as the initiative enters its second month, more and more reports are emerging of seizures of vast quantities of hoarded cash in the new notes. Like water reaching the sea, the corrupt, it seems, have found ways to navigate around the government’s new obstacles.
In just two states alone, India’s Income Tax department said on Wednesday that it had recovered 202,200,000 rupees (roughly $3 million) in new 2,000 notes, according to ANI News. In those two states, Karnataka and Goa, the department said it had registered a total of 36 cases and recovered unaccounted-for assets – mostly in cash, jewelry and gold – in excess of 10 billion rupees (roughly $150 million).

Stories of humongous seizures of assets including new currency have become so common that news outlets are simply adding them as bullet points to stories with running tallies. A sense is building that while millions of Indians languish in ATM lines, the old black money system is simply restarting itself with the new notes.
The biggest question is how people are getting their hands on such huge stashes of the new currency. A sting operation by the India Today news channel revealed one way: visiting your local politician. Reporters posing as businessmen approached four politicians in and around New Delhi, none of whom were from the party led by Prime Minister Narendra Modi. They said that they had large quantities of old notes that they wanted to launder into new ones. Each of the four politicians said that they could arrange the deed for a 30 or 40 percent cut. On Dec. 6, a politician from Modi’s party was arrested in the state of West Bengal with 3.3 million rupees in new notes.

Bank employees, from local tellers to a staffer of the Reserve Bank of India, have also been implicated in laundering schemes. The RBI played down the involvement of its employee, whose title was “senior special assistant,” saying he was a “junior functionary.” On Tuesday, the RBI instructed banks around India to keep strict records of all deposits and withdrawals, and promised large-scale audits in the near future.
Modi has staked his reputation on weeding out corruption through demonetization, but the endless news of cash seizures has many wondering if corruption is more deeply endemic than he realized. It was just last week that police in the central city of Hoshangabad stopped a minivan and found 4 million rupees in new notes stuffed in a black cloth bag inside. On the front of the car, in thick gold lettering, were the words: President, Anticorruption Society.

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Cleaning system of black money very high on my agenda: PM Modi

Cleaning system of black money very high on my agenda: PM Modi


PM Modi added the economic process in India is being geared towards activities which are vital for generating employment or self-employment opportunities.

Against the backdrop of his demonetisation decision, Prime Minister Narendra Modi said on Wednesday that cleaning the system from black money and corruption is “very high” on his agenda amid a push towards employment generation and self-employment opportunities. “India is currently witnessing an economic transformation… We are now moving towards a digital and cashless economy,” he said while addressing via video conferencing the ‘Economic Times Asian Business Leaders Conclave 2016’ in Kuala Lumpur along with his Malaysian counterpart Najib Razak.
“Presently, cleaning the system from black money and corruption is very high on my agenda,” Modi said, against the backdrop of his November 8 decision to scrap notes of Rs 500 and Rs 1000 denomination. PM Modi added the economic process in India is being geared towards activities which are vital for generating employment or self-employment opportunities.

The Prime Minister told the gathering that a number of steps have been taken to attract greater FDI and listed the various steps taken in this direction. He also mentioned that amendment to the Constitution to pave the way for Goods and Services Tax (GST), which will overhaul the indirect tax system in India, has been cleared by Parliament and “this is expected to be implemented in 2017”.

“We welcome those who are not in India so far… India is not only a good destination. It’s always a good decision to be in India,” Modi said. “We have opened up new sectors for FDI and enhanced caps for existing sectors,” he said, adding the government’s concerted efforts on major FDI policy reforms continue and conditions for investments have been simplified. Total FDI inflows in the last two and a half years have touched USD 130 billion, Modi said. “The positive change in policy, regulatory and investment environment in India is recognized by both domestic and foreign investors,” he said.

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We are seeing a fast V-shaped recovery post demonetisation: IndusInd Bank

We are seeing a fast V-shaped recovery post demonetisation: IndusInd Bank

Most opinion peddled about demonetisation is wrong, says IndusInd BankBSE -1.68 % chief executive Romesh Sobti. There may be short-term pain, but the benefits are more enduring, he tells ET’s MC Govardhana Rangan and Joel Rebello in an interview. Edited excerpts:

The hot topic in the country now is demonetisation on which the views are extreme.What do you think?
There are so many experts commenting on demonetisation, but our sense is that the pace at which the informal economy is converting into formal economy is surprising. The adaptability of people to switch to non-cash modes of living and creating livelihoods is very rapid. The trader has the option of shutting down or remodelling his business without tax evasion.People who are wailing the most are the ones whose businesses are predicated on tax evasion and that cannot be the viable proposition in the new scheme of things. Therefore, the remodelling of the informal economy is happening rapidly even in our businesses like microfinance and vehicle financing. After the initial few days when we saw some slowdown in disbursements and collections, we are seeing a pretty fast V shaped recovery and many of our partners also are saying the same thing. Microfinance recovery rates are now almost at normal levels in spite of the fact that the new notes many not be there. Disbursements of Aadhaar based direct transfers have also been fast-forwarded. Overall, the adaptability of people and willingness to do without cash is also surprising us.

But there is a hit to the economy. How bad is it going to be?

I think you are shooting in the dark trying to estimate the impact on GDP. There are many Cassandras who say the GDP will crash. I question their ability to forecast. The sensing on the ground is is that businesses are rapidly remodelling. There may be some impact on GDP, but it’s a gross exaggeration to say that we will lose many percentage points because we have no way to forecast it. Our people will adapt quickly to the new circumstances and discover that cash is not the only way of doing business. Paying taxes and, therefore, bringing a larger part of your informal business into formal businesses is the way to go. The pains we are seeing are the pains of remodelling businesses.
How long will the road to recovery be?

Recovery is happening much faster than people thought because the option is to lose livelihood or pay taxes and continue your business models. People will not choose to lose livelihood. To sympathise with those who evaded taxes is very difficult. If you do heavyweight exercises, your muscles pain, but that’s a sweet pain because you know your muscles are getting stronger. I think the economy is going to come out stronger. There may be loss of GDP, but the recovery is going to surprise everybody. ..

What has been the impact on your own business? There are some businesses that had elements of cash. Poor rural woman who used to pay back in small denomination notes and business correspondents stopped collecting those notes. But it took very little time to recover. In the first few days, collections went down 30% to 40% but within 15 days, the recovery percentages went back to the 90s. In some places, we have 98% recovery already, so in that sense, we don’t feel the need to use the regulatory dispensation at all.

Some say that even though the intention was justifiable, the way it was handled could have been better…

That’s typical of our country. If you didn’t do anything, you will be perpetually blamed for not doing anything and if you do anything, (they say) you could have done better. But the point is that there had to be an element of surprise in this. You couldn’t announce it in advance. The surprise element also goes into many other parts like printing of notes. My own feeling is that the need for remonetisation in terms of currency supply is not going to be the same as the demonetised inventory because you are not going to need the cash. I think the total amount of cash needed in the system is going to shrink, so why should you print the same amount?
Yes of course, you can say that the supply should have been uniform across the country, but the logistic including banks. Bankers have stood up to this cause as a national duty. That pain had to be there and I don’t think you can point fingers to say you could have done it better.

What about the benefits? Are they over stated?

There are many impacts. Take a small SME company. Banks always found it difficult to lend based on the balance sheet because there was not enough disclosure on the balance sheet, but we knew that there were other parts of the business that were not being disclosed and, therefore, surrogates were being used. Now you will bring that 40% or 50%, which was not being shown on the balance sheets, so my ability to lend to them will increase.These companies will have health ier balance sheets. These benefits will come in the next 12 months.

For the government and the masses?

Then there will be benefits on tax collection. It has been reckoned that whatever Rs 11-12 lakh crore that has been collected, a lot of that is undisclosed income, which has to be taxed and that should go into the revenue kitty and go back to the people whether through tax relief or justified subsidies. Those benefits should accrue in the next fiscal year. We should not have to wait five years for that. The widening of the tax net is the massive benefit. Paying taxes is going to be a way of life for a larger population, therefore, revenue collection should improve. Can it go back in the form of lower taxes like the minimum slab that can be taken up? That’s the immediate benefit and is a way of recirculating the money back and creating consumption demand. Those are the things we should watch in the budget closely.
There is also an argument that the entire money is coming back into the system, so where is the black money?

The first for all those people who had undisclosed income was to put it back into the system. The second point is to pay tax on it, which is yet to be experienced. People are saying that maybe Rs 3 lakh or Rs 4 lakh crore was to be buried and that would have gone as transfer of wealth. My point is that if that doesn’t happen, you will recover it in taxation. To that amount more has been disclosed, so now you recover and tax it, that’s the whole issue. You have taken the money into the formal system and you can now calculate taxation, impose penalties and raise revenues. Secondly, you won’t allow it to be recirculated back at the same speed. People are saying it’s gone away in Rs 1,000 notes, but it will come back as Rs 2,000 notes, but at what speed? You can only draw Rs 24,000 per week even if you put in Rs 50 crore. So the speed at which you draw cash has to be restricted.In Europe, for example, you cannot withdraw more than 500 euros. Our

ATMs allow Rs 2 lakh. Why should you allow that sort of money?

The need for reducing cash automatically eliminates the ability to give cash as graft. The flow of cash back into the system must be controlled and reduced. There were assumptions that the RBI’s saving from this demonetisation will give the government a bonanza…
The government never said that.These were all speculations. I have not heard anyone senior in the government say this was our expectation, that we should not receive the whole thing back. The question is that if that does not happen, so much more has been disclosed and now become taxable. The tax kitty has increased and, therefore, the ability to raise revenues from taxation also goes up by the same amount.
What does it mean for the banking system as a whole?

With the creation of payment banks and digitisation, this was going to happen, only that it has now been fast-forwarded because cash is not needed to the same extent. Banking system as a whole, therefore, has liquidity, but the question is whether the banking system has the ability to deploy these funds. As it is, credit growth was sluggish, so how quickly will banks deploy this money and how much demand for credit will there be, that’s the biggest issue. Under the MCLR system, there is automatic transmission. Banks can only make money by deploying liquidity. The cost of deposits and cost of credit both are plummeting.The MCLR system is working, which means the cost of borrowing goes down, which should translate into demand for credit after this blip we see. So you should see an increase in the credit offtake and the first point of call will be retail because, they are more agile.
How long will this situation continue? Is there a structural shift for the Indian economy?

I think it is here to stay. We are going to see very liquid circumstances.Low cost, benign interest rate scenario for quite a long time. You will have a longer period of benign low-ranged interest rate scenario, which is good for the system. All this is linked. You manage fiscal deficit because your tax revenues go up.Therefore, inflation remains under control, therefore, interest rates remain benign. So you have reversed that vicious cycle, which got us into trouble three years ago. To give subsidies, you raise deficit. Welfare funding in the previous regime caused fiscal deficit, which caused bouts of inflation, which used to come once in five years, then in two years, and became permanent. That cycle has been reversed. You control fiscal deficit by giving subsidies after creating the revenue, not by printing money. Low fiscal deficit, therefore, will bring inflation down, therefore, interest rates down, therefore long period of benign interest rates, and, therefore, demand should surge. To Know More: http://homesearchindia.in/