RE: GOING CASHLESS ?

Dear Guillaume,

Many thanks for your prompt reply and for those compelling arguments against tagging high denomination currency notes with RFID

I await to read the full report on 12 April

No doubt , privacy / anonymity are valid concerns but my suggestion is limited to :

*  Tagging only Rs 500 / 1000 currency notes

*  Tracking these ONLY in cases where there is a Concentration of Rs 10 Million worth of such high denomination

    notes within 1 Sq Meter area

Even this ( tagging ) will not help locate and bring back , $ 182 / $ 500 Billion worth of undisclosed assets that

Indians have illegally stashed abroad

But possibly TEN times as much Black Money gets generated in India's Parallel Economy , each year !

My idea is to STOP that future generation

Of course , a much better - and universally welcome - alternative , would be :

"  Abolish Personal Income Tax , thereby totally eliminating all incentive to generate Black Money through tax evasion . 

All payments will get made through official channels . 

Within 6 months , all Black Money will become WHITE  and flow into the productive mainstream of the economy

Revenue loss of Rs 2.5 lakh*crore but GDP will go up to 10 %  !

Warm Regards,

Hemen Parekh (M)=91 – 98,67,55,08,08

From: Guillaume Lepecq [mailto:guillaume.lepecq@agis-consulting.com]
Sent: Friday, March 25, 2016 11:56 PM
To: Hemen Parekh
Subject: Re: GOING CASHLESS ?

Dear Hemen,

Thank you do for your kind e-mail. I am delighted you enjoyed the article.

If I understand correctly you are suggesting to incorporate RFID into high-denomination banknotes in order to avoid tax evasion.

This idea is not new; let me point out why I personally believe it would not work.

• There is a need for an anonymous payment instrument

In a democracy, it is perfectly legitimate to have the freedom to make a transaction, or to store money without the monitoring of the State.  And this anonymity is not synonymous with tax evasion. One may wish to buy a present for his wife, without her seeing the transaction on a bank receipt. People who are ill have the right to purchase medicine in a confidential way. I recently spoke to a pharmacist in France, who mentioned that many young people purchase contraceptives in cash.

• Cash is anonymous but the anonymity is limited.

The anonymity of cash is limited by regulation, technology and bulk. Regulations include for instance imposing a cap for cash transactions; many countries in Europe have implemented this. Internationally, the transportation of cash across borders is limited to $ 10,000. Technology, includes for instance inks used in banknotes which can be detected by sniffer dogs. Also, forensic taggants are used in some countries and are sprayed on a banknote in the case of a robbery; when the taggant is detected, the banknote can ve traced back to the robbery. Lastly, cash is heavy and bulky to store and transport.

• Other anonymous payment instruments pose a far bigger threat

During the recent terrorist attacks in Europe, it has appeared that the terrorists have used anonymous pre-paid cards to fund the activities. Virtual currencies also offer a cheap alternative to make perfectly anonymous transactions with a simple click.

• Using electronic tags in banknotes poses operational challenges

Firstly, it would increase significantly the cost of the banknote. But what happens if the tag is deactivated? There are stories where consumers have deactivated chips in ID documents by ‘frying’ them in a micro-wave. Would deactivated banknotes still be legal tender? Also,a  real fraudster would simply shift to another payment method and in the example you present, he would use lower denominations that do not carry electronic tags.

I hope this helps.

I invite you to visit www.cashesentials.com. The full report which was mentioned in the Business Line article will be available as of April 12.

With kind regards,

Guillaume Lepecq 

De : Hemen Parekh <hcp@recruitguru.com>
Date : mardi 22 mars 2016 03:50
À : Guillaume Lepecq <guillaume.lepecq@agis-consulting.com>
Objet : GOING CASHLESS ?

Dear Guillaume ,

Just read your very interesting interview ( The rustle of notes, clink of coins ) in Business Line ( 21 March ), where, in relation to the role played by cash in tax evasion, you say :

"  Cash is not the only way to do private transactions...... Billions of people are using cash the right way, a few may not be "

To solve the problem of use of cash for tax evasion, do you think my following suggestion will work ?

I have sent this to the Central Government and to the Reserve Bank of India

I will appreciate your views

hemen  parekh

www.hemenparekh.in>Blogs

Marol , Mumbai , India

hcp@RecruitGuru.com

( M ) +91 - 98,67,55,08,08

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Saturday, 23 January 2016

GOING CASHLESS ?

Government is encouraging use of Credit / Debit cards , in order to reduce cash payments , which , currently account for nearly 80 % of all payments

Measures ( Positive and Negative ), being considered / announced , include :

*  Elimination of transaction charges on purchases of Petrol , using Credit Cards

*  Income Tax benefits for individuals making payments thru Debit / Credit Cards

*  Disclosure of PAN for

   #   cash transactions above Rs 2 Lakhs

   #   settling hotel bills that exceed Rs 50,000

   #   booking air tickets  / tour packages , exceeding Rs 50,000

   #   opening a bank account ( except for Jan Dhan Yojana a/c )

*  Incentives to shop keepers and traders to accept electronic payments

While announcing these measures , revenue secretary , Shri Hasmukh Adhia said :

"   ...to collect information on certain types of transactions from third parties in a non-intrusive manner , the income-tax rules require quoting of PAN where the transactions exceed a specified limit "

Are we missing the woods for the tree ?

What can be more " non-intrusive " than embedding Rs 500 / 1,000 currency notes with RFID micro-chips , thinner than a hair ? Each sensor, continuously broadcasting its location to the Income Tax Authorities , even as it moves from one hand to another ?

And " shouting from the rooftop " each physical location, where there is an accumulation of Rs ONE CRORE( 10 million ) worth of such notes !

And assigning a  UNIQUE  Internet Protocol ( IP V 6.0 ) Address to each and every such high denomination currency notes ? - which could , even be its Currency Note Number  ?

Why bother to " incentivize " citizens to use electronic payments  ?

Why bother to introduce rules / regulations and make life difficult for everyone - including for those officers responsible for enforcement ?

Just implement this and watch 90 % payments being made thru electronic means / devices , within 6 months !

I had sent my above mentioned suggestion to Shri Arun Jaitleyji , when Govt had put out a paper ,

" Draft Proposals For Facilitating Electronic Transactions " ,

and sought public comments

Implementing this does not require passing any bill in Rajya Sabha !

If you have a better idea to dramatically reduce the menace of BLACK MONEY and CORRUPTION , in a single stroke , I request you to rush it to Shri Jaitley-ji , before 29 Feb 2016 ( Budget date ) at...

*  'ajaitley@del5.vsnl.net.in'  /  'ajaitley@sansad.nic.in'

Or , just forward this to him 

A recent news report spoke of printing of 30 Crore notes of Rs 1,000 denomination , WITHOUT that identifying silver thread

Some of these defective notes even went into circulation !  Rest had to be destroyed

This would never happen if a RFID micro-chip ( much thinner than that Silver thread ) were to be embedded in each note

A Inspection device , costing no more than a few thousands of rupees and  sitting on the Printing Line would immediately detect any note WITHOUT the RFID

A bell will ring and a robotic arm would pick up and set aside such a defective note

And if this was to happen to 10 notes in a row , the printing press will automatically shut down  !

This technology is already working in hundreds of factories around the World

And embedding a RFID chip is much simpler than inserting that Silver thread  !

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hemen  parekh

24  Jan  2016

www.hemenparekh.in