Demonetisation and Black Money-II

On 8-11-2016 PM Modi had announced the withdrawal of Rs. 500 and Rs. 1000 currency notes.
They could only be deposited in Banks and then withdrawals could be made from bank accounts.
This move was stated to control the menace of Black Money in India.

However government had not spelled out the exact mechanism by which  demonetization was going to control black money, maybe it was vague on purpose .

As the government had not declared the express objectives of whole exercise, it was left to the public to come up with reasons on their own.

It was commonly thought at the beginning of exercise that those who are having black money will not be able to deposit them in banks, and the amount of money not coming back would be black money.

However this does not seem to have happened, although Reserve Bank has not declared the final tally but a bulk of money in circulation seems to have come back.

Thus the most direct method of eradicating black money did not work, now we are left with secondary effects of this move.

The secondary effects are based on the premise that the mere deposit of money in accounts does not make it white, and a thorough investigation of deposits will throw up black money.

This is a long drawn exercise and whether it is effective or not will be known in long run only.



There are some memories which are etched in your memory and never fade.

I am sharing one such memory.

It was a road trip long time back in the backyard of rural India.

We stopped at a place which only had a very small shanty selling tea, biscuits, toffee etc.

Soon a group of 4 very young children come to that shop, by the look of clothes on their body you could see that they had very limited possessions.

Between them they a coin of 10 paisa (It is no longer in circulation) and wanted to buy toffee for themselves but the amount was not enough to buy toffee for all of them.

They discussed it among themselves and then bought a small hard candy with that money.
It was one of those candy which could not be divided as it would shatter if they tried to do so.
They had come up a with a brilliant solution to the problem.
First child unwrapped the candy, put it in his mouth, took it out, gave it to next child who did the same.
In this way they shared patiently that small piece of toffee amongst them.
These children must not be more than 5-7 years old, but they all waited patiently for their turn, did not fight, and shared that small piece of toffee amongst themselves.
The expression of joy on their face was unparalleled.

I was frozen by that sight, it is now more than 35 years since that incident.
I do not remember the road, the place or even the exact date when it took place, but the faces of those children are as fresh in my mind as if I saw them today.

Looking back I now think that I might have done something that day, but at that time I was too dumbstruck to react.

Still don’t know what to say.




 (Chapter 4, Verse 34)


Tad viddhi pranipatena

Pariprasnena sevaya

Upadeksyanti te jnanam


(Learn that by humble reverence, by inquiry and by service.
The men of wisdom who have seen the truth will instruct thee in knowledge)


Bhagvad Gita is an ancient Indian text whose origins have been lost in the vast sands of time.

As with most ancient Indian texts the original author is not known nor was it considered important as to who authored it.
It was collective wisdom of sages which was collected and passed on.
It was passed on orally through the ages and was written at very later stage.

The earliest version  written was  in “Sanskrit” language, which was language used by scholars at that time around 5th Century BC.

The word “ Bhagvad” means God in Sanskrit and “ Gita” means a song.
So the text literally translates to “Song of The God”.

It has 18 chapters and  contains verses which are numbered, so a typical verse is referred as 4.34 which means Fourth Chapter, 34th verse.

I have taken 34th verse from 4th chapter for this article.

This verse talks about knowledge and learning and the best way of learning and understanding.

Learning and understanding is a prime objective in life.

It is through learning that we can understand our purpose in life.

In order to learn we need to find a teacher who can give us knowledge.

Wise men will teach us the truth if we approach them in spirit of service and reverent inquiry.
Untill we realize the God within, we must act according to the advice of those who have had the experience of God.

It is important to understand what is been taught, if we simply accept the teaching without understanding it the whole purpose of knowledge is defeated.

If we accept what is said in the scriptures, or taught by the teacher in unthinking trust, that will not do, reason must be satisfied.

Application of knowledge by personal experience is equally important, if we merely hear of many things but do not try to experience them, then we will be like a spoon which has no idea of the taste and qualities of soup it contains.

Respect and obedience to a teacher is important but the devotion to the teacher has to be combined with unrestricted right of free examination and inquiry.
Blind obedience is not desirable.

These teaching which are over 3000 year old are as relevant in current age as they were at that time.
Today there are several teachers/leaders who require unthinking obedience from their followers to their dictates.
They seem to believe that the death of intellect is the condition of the life of spirit.
Many people are drawn to them not so much by their spiritual powers as by publicity of their agents and the human weakness for novelty, curiosity and excitement.
This is against the Hindu tradition which insists of “jijnasa”or inquiry, “manan” or reflection or “paripasana” as said in GITA.

We should also keep in mind that mere intellectual apprehension will not do.
Intellect can give only fragmentary views, glimpses of the Beyond, but it does not give you consciousness of the Beyond.
We must open the whole of our inner being to establish personal contact.
The teacher can show you the path, the method to think, but the disciple has to tread the interior path.
In order to obtain true learning we must consort with the great minds of the past, reason about them and then apply these learning to our present day life.

There are numerous problems in our current day life which can get solved when we apply our minds in this way.
Many of us read old religious texts and without understanding them try to apply them in our present life and well as try to force others to do the same.

Many find it easier to force old traditions and practices on others in the name of religion or culture, if a tradition was in practice thousands of years ago it should not simply be followed because it followed at that time.
If we apply our minds and try to find out the reason of that tradition,  and then try to evaluate whether it should be followed today or not, we would have followed the true path of knowledge.


On November 8th 2106, Indian PM Modi declared scrapping of INR 1000 and INR 500 currency notes.

They ceased to be legal tender and could only be deposited in bank accounts,

Across the counter exchanges were allowed for people who did not have bank accounts.

There seems to be a misconception about current demonetisation exercise that all money that has come back to banks is white money.

Whatever has come back or will back is simply money, neither black nor white.

The basic purpose of this exercise is to make people declare how much cash they are holding. Whether it is tax paid or not will be determined later on.

There is two type of black money:

Type 1 : Money from Illegal activities:-

This is money earned from illegal activities like drugs, smuggling, bribe extortion, fake currency, etc.

People having this type of money will not declare it in their own name and will try to find out ways to make it white. A large percentage of this money might not come back, as the risk is too much for holders, they will have fear to getting caught under various IPC (Indian Penal Code Sections).

Type 2: Money from Legal Activities, but not declared:

This type of money is generated by not declaring legal activities like selling in cash and not reporting.

People having this type of money have lesser risk in declaring than the above category, they would mostly be liable for extra tax.

A large percentage of this money will come back as they will not risk all of money.

This whole demonetisation exercise gives government a  data at one place to access the nature of deposits.

The success/failure of this whole exercise will depend upon the followup action taken by government in subsequent months.



All of us are taught difference between “Right” and “Wrong” from the day we are born.
Each family, community, religion etc. has their own criteria of right and wrong.
But is there a universal definition of right and wrong ?

It is very difficult to find a universal definition of what is wrong or right, to some being vegetarian is right and non vegetarian is wrong.
The problem occurs when things which are right normally become wrong sometime and vice versa.
This is illustrated by following story from ancient Indian literature.

There was a Hermit who always told truth.

One day a merchant came running to his ashram because he was being chased by bandits.
The merchant asked for shelter and hermit gave him a place to hide.
Soon bandits came and asked hermit whereabouts of merchant, as the hermit could not tell lie he told the place where the merchant was hidden.
The bandits robbed and killed the merchant.
Was hermit right in telling truth and causing death of a innocent man ?

Let us take another example :

We all know that killing others is wrong, but if someone is trying to kill me or someone dear to me, then is it right for me kill him or is it wrong ?

To arrive at some clarity let us go to the root of issue;

How did the concepts of right and wrong came into existence.

A Million years ago human species evolved from its primate ancestors.
These primitive humans were basically foragers and scavengers; they gathered fruits, nuts, etc and scavenged from kills of larger predators.
At that time they did not have tools to hunt larger animals.
They lived in small bands of 10-20, like most animals they did not require complex social interactions and hence did not develop them.
Over thousands of years they learned how to make tools and could hunt much bigger animals, this required much larger number of humans for planning and hunting efficiently.
They also discovered that they could plant seeds and harvest crops which allowed them to settle in one place instead of roaming throughout the land.
These activities required cooperation amongst larger groups of humans and they needed rules to regulate their actions.
They also discovered that not all humans had same skills, some were good hunters, farmers, tool designers, weapon makers etc.

Now suppose a hunter needed weapons to hunt animal, so he went to a weapon maker and promised to give him a share of his hunt provided the weapon maker gives him the weapon he needs.
This promise is a fiction of human mind and represented a great leap forward in evolution, humans were now able to create figments of imagination in their mind and share it with others.
This became precursor of laws that we follow today.

As the time went on the groups began to increase in size, and now humans could generate enough to feed themselves and store for future.
This also made spare time available.
Till the groups were small every individual knew each other and trust was easy, at the most you needed one extra person as a witness for your transaction. But this was not possible in large groups or two separate groups, so humans needed a common entity to trust each other.

This basic need for an entity which could serve as sort of promise keeper was needed for people to trust each other. And another fiction was created, both accepted a fictional entity, like a holy tree, rock, natural elements like sun, moon, wind etc.
This laid the foundation of modern day religions, concept of state.

Each group of humans created its own rules for its members to follow, and they naturally differed with each other. When two groups came into contact they made some common rules to be followed when dealing with each other.

The concept of right and wrong originates this set of rules, as each group had its own rules they devised their own set of rights and wrong.

For example a certain medicinal plant was rare in an area but was very useful, so in order to protect the plant, it would have been simple to declare it holy and prohibit its cutting down or destroying.
An area far from this place might have numerous plants of this species and hence did not feel any need to protect this plant.

Over next thousands of years these rules survived, but people forgot the reason for making these rules. Some of these rules became part of religions, others became part of custom.
When one region occupied another area its might have tried to force their own set of rules there, which happens even today.
Imagine when these groups finally met one day and discovered that the plant which one group worshiped was of no consequence to other group.

We must remember that religion, state, custom, country etc, are products of our imagination and they do not exist in physical world, they exist in our minds.
These concepts have allowed us to live in very large groups, each country each religion is a group of people believing in common concepts.

Most of us have a habit of classifying things as Right or wrong, there is a third category between these two,“ I do not like” .

There are many things which I do not like but that does not mean it is wrong.
For example I do not like eating “Lauki”(bottle Groud), but does that mean eating lauki is wrong ?

A lot of discord in this world can be avoided if before labeling anything as “Wrong” and start opposing it , we stop for a moment and think maybe it is something that “I do not like”.
The same thought process works in reverse direction also, maybe something that I call  “ right” might be simply something that “I Like”, and before I start fighting someone who does not subscribe to my view, I might consider it might be something that he “ does not like”   and thinks it to be “wrong”.

A conscious thought process is required before performing an act, maybe if we judge the action every time we might be able to arrive at right decision.

It would have been better if the hermit in above story thought about the action he should take instead of blindly following the action of telling truth.
He might have come to conclusion that saving life of an innocent man is better than telling truth.


References :

  2. Sapiens-A Brief History of Humankind- Author:- Yual Noah Harari 


Hope is a strange thing, it makes you yearn for good times and makes your current misery bearable, It has been one of the enduring traits of mankind and has helped people pull though great miseries and bad times.

Indians are not new to hope, they have been “hoping” since Independence in 1947.
A vast majority have learned to live with their hardships in hope of better times,it is a matter of debate whether any of these hopes have been fulfilled.
Some will say yes while others will vehemently deny it.
Those with means, education and opportunities have seen some of their hopes getting fulfilled, while for a number of Indians “A Good Life”  is still a hope.

Many Indians have seen their hopes being dashed again and again by a self serving cabal of ruling class comprising of corrupt politicians and bureaucrats.
When hopes do not get fulfilled over generations for a very long time, frustration starts to set in which leads to anger, this frustration has an outlet in a democratic system in form of elections.
People get an opportunity to change their leaders after every few years and they select a “ Leader” whom they hope will be able to fulfill their aspirations.

In past 15-20 years Indians did not give absolute majority to any political party as they did not trust any political leader.
In this sense 2014 was a watershed year, where Indian people chose a majority government at “Center” and  “Delhi State.

Both of them were given absolute majority to govern and again people “hoped”.

The state of Delhi was a perfect opportunity to show how good governance can transform India.
It is small in size, inhabited by self aware, educated people, well connected nationally and internationally, seat of Central Government  etc.
It could have been made a world class city.
Instead of all this happening we have seen a string of self- victimizing statements.
The leaders of Delhi government have forgotten that governance does not mean mouthing inane utterances, if it meant only that India would have been heaven by now.
Governance means the ability to get work done with existing infrastructure and people.
It  also does not mean complaining about “ Why” work is not being done.
For many in Delhi “hope” is already turning sour, it is sincerely “hoped” that things will improve.

The Central Government in Delhi had a even tougher task.
Huge size of India preludes one single solution to all problems.
The Initial years of Modi Government were spent in streamlining the system.
A number of issues distracted it from actually performing, some self inflicted and some beyond its control.

The recent step of suddenly stopping circulation of high value Rs. 500 and 1000 is a welcome step in direction of controlling black money and has again created “hope” in minds of citizens of India for a Cleaner India. (No pun intended)

It is this hope which is making people to endure the hardships due to sudden withdrawal of currency, the sooner people get back their money the better it would be for everyone.

Both these leaders have some time to see that hopes of Indian people are not dashed again.

One of them has already shown what and when things can be done
and for other , well there is ………………………………………..“hope”.

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