The trick is that rhetoric works at the same level as fact in the fast processes of the brain - the Type 1 of Daniel Kahneman’s Thinking Fast and Slow. Truthiness is biological!
I think something we need to recognise here is that The Dictator (Hitler, Stalin, Mao,…) is never either left or right; but he’s always a fact ignoring spin doctoring propagandist who uses violence cynically (aside: that’s an insult to Diogenes) as a means to rile up the mob and keep him in power.
Many of whom were/still are Modi’s supporters; he’s exploiting the feeling, not necessarily by providing workable solutions.
They get paid in cash, but almost nobody is dumb enough to keep it in cash. There are lots of routes for it to take:
- Convert it into gold or other property - ever heard of anyone paying all cash for a car? India is the largest importer of gold in the world, for good reason.
- Convert it into land - why do you think there’s a “cash component” in land deals in the first place? Apart from avoiding taxes, it’s a way to launder black money.
- For the really advanced player, round-trip it - send it abroad somehow, say through a Hawala transaction, put it in a bank account in the Mauritius, then use a P-note to bring it back and invest it, completely in the clear, mind you, in emerging markets. India’s highest FDI is not from the US, not from the EU, not from Russia or China, but from Mauritius. As ridiculous as that is!
Keeping it in cash is a loser’s move - it doesn’t earn interest, it doesn’t fetch you any other gains. At best you might be able to build a Scrooge McDuck swimming pool and wallow in it. People only keep it in cash for the short term. Most of the money that’s unaccounted is in gold and land.
And yeah, demonetisation doesn’t help one way or another with all that. It only goes after a few small-time traders who are getting mostly paid in cash, and aren’t declaring sales tax.
