Arithmetic of Demonetization - big dividend unlikely

The Times of India says that 90% of scrapped notes have been deposited and a big dividend is unlikely. Visit:
http://timesofindia.indiatimes.com/india/90-of-scrapped-notes-back-in-system-big-dividend-unlikely/articleshow/56210235.cms

Obviously, there would have been a dividend to the Govt. if a large number of "owners" of black money had burnt their banned currency holdings instead of laundering them, but those guys have obviously paid a large number of intermediaries to deposit the loot in small lots under different names. 

One hope is that income tax collection this year could be significantly more and thereby provide a dividend to the government. 

Another hope is that more people will pay more income tax in future years because the government has shown that it is willing to take major steps to penalize tax evaders. 

The doubters point out that slowing of the economic growth will reduce tax collections this year at least. 

The results for this year will be really known only after March 31. Meanwhile the budget is expected early in February. It may bring reduced corporate taxes as indicated by the Finance Minister informally. What else can we expect? Visit
http://indianexpress.com/article/business/budget/budget-2017-here-is-what-we-can-expect-from-the-upcoming-financial-year-4435513/ 

Remembering Professor MGK Menon (1928-2016)

                             Photo: ISRO, from Wikimedia Commons

Prof Menon FRS, passed away on November 22, 2016, less than a week short of his 88^th birthday. I had worked at TIFR from mid-sixties to mid-eighties. He was Deputy Director, TIFR when I joined the Institute and was appointed Director in 1966, after Dr Homi Bhabha was killed in an air crash near Mont Blanc.

I don’t intend to write a scientific or technical essay here describing Prof Menon’s (MGK’s) very significant contributions to science, and his leadership that played a role in ensuring that science and technology activities contributed to nation building. You may consult Dr Ramanath Cowsik’s articles for this ( http://www.currentscience.ac.in/Volumes/105/04/0522.pdf and

http://www.currentscience.ac.in/Volumes/111/11/1868.pdf ).

I will only note down a few personal memories. I should, however, mention the success MGK had in leading the TIFR and the Dept. of Electronics. The environments he created and preserved enabled hundreds of us in science and technology to succeed in our work. 

My early memories of those days include one of 1964. I was working for my M Tech degree from IIT Bombay, doing a one-year project at TIFR during my second year of studies. Dr PVS Rao (PVSR) was my project mentor along with Prof JR Isaac at IITB. It was a day in May 1964, and Dr Rao had invited me to accompany him as he went to the airport to receive the CDC-3600 computer TIFR had ordered. It arrived by a chartered 707 and the Films Division was there to cover the arrival and to get an interview with Dr Rao, and we had over a dozen trucks waiting to take the computer to TIFR! PVSR had asked me to phone MGK and tell him about the arrival.

A few years later, when I was a Research Associate at TIFR, I ran into MGK at a party the molecular biologists were having to celebrate something. I was pleasantly surprised to find out that he recognized me and knew what I was working on. Colleagues ascribed this to his photographic memory, but I personally think that must have had an organized way to keep track of the relatively small research staff TIFR had at that time; but it would have surely been more than a hundred! Uday Bhaskar’s article in The Hindu ( http://www.thehindu.com/news/national/A-humanist-of-rare-elegance-statesman-of-science/article16685875.ece ) corroborates my comment on MGK’s remarkable attention to detail. I should also mention that he was a very good public speaker. His talks must have been the result of good preparation. No spontaneous public talk could be that good.

During the fifties, under the leadership of Homi Bhabha, TIFR had created three groups in three new fields of work: molecular biology, radio astronomy and computer science & technology, centered around three Indian scientists who had done promising work abroad and were willing to return to India. After Bhabha’s death, it was MGK’s turn to lead the TIFR. He supported Dr R Narasimhan (RN) in broadening the base of computer science and technology work in the Institute. He also supported Dr PVS Rao in his work on the design and development of a real-time computer and on large real-time applications of national importance.

MGK’s interest in technology went way beyond the computer field and encompassed many areas in electronics, including microwave technology and semiconductor electronics; work in these areas at TIFR were headed by Mr RVS Sitaram and Mr KV Ramanathan respectively.

A talk MGK once gave illustrates the excitement of cosmic ray research at the time of his doctoral work at the University of Bristol. His thesis adviser was Prof Cecil Powell, who had pioneered the technique of using photographic emulsions to detect cosmic rays. Powell’s team discovered a new type of meson, the pi-meson in 1947 using this technique. MGK had joined Powell’s lab in 1949 to do his PhD work. MGK said in his talk that one evening he was working at the lab, when a telegram arrived for Powell. MGK received it and called Powell on the phone; his home was within walking distance. Powell asked him to open the telegram and read it out over the phone. Well! The telegram informed Powell that he had won the Nobel Prize for Physics! Powell said, “Goku! Why don’t you put that telegram in your pocket and walk down to my place?” Menon said that it was his first sherry that day!

Astronomers paid a unique tribute to MGK in 2008, naming the asteroid 7564 as Gokumenon in his honor. They had discovered it using a telescope in India.  

Dr Cheeran Abraham Varghese (1934-2016)

Dr Abraham Varghese, engineer, researcher, and business leader, will be remembered for his gentle humour and his fund of knowledge gleaned from years of voracious reading. He had returned to India after his studies in England which had led to a PhD in management. He rose to leadership level positions in Brooke Bond and Rallis. He and Dr (Mrs.) Mariamma Varghese were a perfect couple. My wife Usha and I enjoyed their company and hospitality over the years. My regret is that I did not get adequate opportunity to talk to him about a common interest of ours – operations research, particularly optimization. I knew of his pioneering research in this field, but did not want to talk shop over dinner!  

Dr Abraham Varghese was a popular speaker in academic circles, and a supporter of worthy causes. He and Mrs. Varghese had a large circle of friends in Mumbai. They had moved to Bangalore roughly at the same time Usha and I had. We had left behind many of our friends in Mumbai, and so, were happy to discover that the Varghese family had moved to Bangalore too! The only problem was on an occasion when I telephoned to discuss a seminar with Mrs. Varghese and he picked up the phone. I said clumsily, “Can I speak to Dr Varghese?” His ready response was “Which one?”  The number of PhDs in that house doubled again whenever their two sons, Vivek and Mathew, were in town!

We will always remember Dr Abraham Varghese; he had enriched our lives with his knowledge, wit and wisdom!

S. Ramani

16-12-2016 Update on Demonetization

Please revisit my blog post How to use any bonanza the Govt gets in which I had reported suggestions from Swaminathan Aiyar (SA) for utilizing the 3 Trillion Rupees he expected will be the Govt’s bonanza coming out of demonetization of high value currency notes. Now, the chances of getting 3 Trillion bonanza needs downsizing! I guess he must be re-working his calculations!

The thriller has 14 days more to run, and the climax scene is eagerly awaited. How many of the anti-social elements holding black money will burn their “invalid” notes? How many of them will make asses of the honest tax payers? Crooks are usually no idiots! Besides, many top politicians are willing to serve as their advisers and lawyers! 

RBI says Rs 12.44 Crores of banned currency has been deposited with banks. The Govt. thinks that the figure may be wrong because the banks may have mixed up deposits of valid currency as well while adding up the total. Visit

Banks get Rs 12.44 lakh crore in old notes till Dec 10

Rs. 12.44 lakh crore in invalid notes may not have come back

The following is the picture if the RBI figures are to be believed; the unit used for money is Rs. Trillions. (I don't talk to my wife anymore about 500 Rs. and 2000 Rs. It is always about Trillions!)  

7-12-2016: Update on how bank deposits are swelling after demonetization

Here is an update on how bank deposits are swelling after the ban on Rs. 500 and 1000 notes was announced on Nov 8, 2016. The table and graph below show that Rs 11 Trillion has been received till Nov 30, 2016. 

There seems to be no slowing down. The speed-up seen during the last three days (day 20 to day 22) after the ban may be due to the fact that none of these three days was a bank holiday. The banks will not accept old 500 and 1000 rupee notes after Dec 30, 2016. Some commentators feel that rate at which old notes are being deposited in banks raises doubts about the success of the demonetization
http://economictimes.indiatimes.com/wealth/personal-finance-news/deposit-of-80-of-banned-currency-in-banks-raises-doubts-about-success-of-demonetisation/articleshow/55771366.cms 

Here is the updated listing of sources of this information:

  

Strange are the ways of those who declare large incomes!

Photo by Sumita Roy Dutta (Own work) 

[CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

One family declares an income of Two Trillion Rupees! 

http://www.ndtv.com/india-news/rs-2-lakh-crore-income-declaration-by-mumbai-family-being-investigated-government-1633843

Fantastic! If there were twenty other families like that, other Indians can quit their jobs and do whatever they like – writing philosophy, climbing Everest, practicing Holistic health, etc. The tax from the twenty-one families can be distributed to the rest of us, and we will take human life to a new plane!

What looks like small potatoes in comparison to the income of the Mumbai family, is the income declared by a poor businessman from Ahmadabad! He has declared only 150 Billion rupees! It is hard to save much in Ahmadabad nowadays!

http://timesofindia.indiatimes.com/city/ahmedabad/Businessman-declares-Rs-13000-crore-under-disclosure-scheme-fails-to-pay-tax/articleshow/55748408.cms

Our real heroes are, however, two officers of the Karnataka Govt. who on their Govt. salaries have managed to save Rs 1.52 Billion!

http://www.thehindu.com/news/cities/bangalore/Rs.-152-cr.-unearthed-in-3-days-two-Karnataka-officials-suspended/article16754145.ece

You see, vegetables are cheap in Bangalore! A frugal family can always save one or two billion rupees!