AV 26th November 2016

Page 1

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Prime Minister Narendra Modi shocked India when he announced the withdrawal of 500 and 1000 rupee notes on 8th November. What ensued was panic and utter chaos prompting the government to come up with supplementary notifications to ease the pain. Following the demonetisation of the higher denomination currency, Indians have exchanged and deposited over £54.40 billion worth of scrapped Rs 500 and 1000 notes at different banks till November 18. Analysts estimate that the shock of the currency ban will shove 0.5 to one percentage points of India's domestic product growth in the current financial year assuming significantly more cash is pumped into the economy by the end of next month. Another report said that growth will collapse to 0.5 per cent in the second half of the current financial year from 6.4 per cent in the first half. According to another economist, it would take two to three months before the cash in circulation gets back more or less to the level it was before. Until that time, there will be stress and not necessarily from guys who

26th November to 2nd December 2016

were hoarding ill-gotten wealth but for normal transactions. Following the demonetisation, people are no longer able to make cash purchases of expensive products without the risk that they will be called by the income tax department inquiring where they got so much cash from, an owner of a retail chain said. The Reserve Bank of India released a statement saying banks also disbursed £10.33 billion over the counter and via ATMs between November 10 and 18. Following the announcement of withdrawal of legal tender status of banknotes of Rs 500 and 1,000, RBI has made arrangements for exchange and/or deposit of such

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notes. "Banks have since reported that such exchanged/deposits effected from November 10, 2016 up to November 18, 2016 amounted to £544.57 billion. They have also reported that the public have withdrawn, during this period, £10.33 billion from their accounts either over the counter or through ATMs," the statement read. Long queues were seen the day on which banks opened after the announcement of demonetisation. The government made several exceptions to calm the frantic mass, allowing people to use invalid currency notes to buy petrol/diesel, rail and air tickets, payment of public utilities, taxes and gov-

ernment hospitals. Just last week, the Indian Banks' Association said total deposit mobilisation by banks crossed £40 billion on November 14. SBI Chairman Arundhati Bhattacharya said a large part of the deposits would be withdrawn as depositors get back to spending. But 10-15 per cent of the money that citizens have been forced to deposit in banks should stay back, she said. She said that SBI has done 110 million transactions since demonetisation and has collected deposits of £13.4 billion. Bhattacharya said the mechanism for exchange of notes was being misused and even though there have been issues with supply of ink, the talk of using indelible ink helped a lot. "I think about 75 per cent of the people were not doing their own stuff. They were being used by others to change money," she said. "The empty ATMs were associated with a cash shortage. They did not realise that there are logistic issues and there's need to recalibrate the machines," she added. The Reserve Bank of India, in the mean time, revealed that the amount

Continued on page 26

150 killed as Indore-Patna train derail near Kanpur

Death toll from India's worst train accident in six years hit 150 after rescuers lifted the last of

metal wreckage checking for bodies underneath. At least 200 workers Continued on page 26

The number of Indian students coming to the UK has halved in 4 years, while thousands choose to go to the US or other European countries instead, a study has revealed. Data from the Higher Education Statistics Agency shows that 16,500 Indians enrolled on degree courses in 2013-14 compared with 31,200 in 2009-10. Study has also revealed the figures indicate that Indians made up of 6% of overseas enrolments in Britain last year, down from 14% in 2010-11. Ministers have claimed that one of the

major reasons for a drop in Indian students coming to Britain in recent years is the closure of nearly 800 bogus colleges that enrolled international students but did not have the required infrastructure or standing. The bogus colleges were mainly in the “further education” sector that provides vocational skills and certification. They were closed after 2010, when Home Office evidence showed many Indian and other non-EU “students” enrolled with them were working instead of studying. Continued on page 26

Indian students saga: Britain’s loss, others’ gain

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