is India just Stiglitz’s playground?

Goldman Sachs hails Modi note ban as rupee swings drop most in 6 weeks

Currency reform will increase banking-system liquidity, and the rupee and local notes will likely outperform Asian peers in the near term, Goldman Sachs analysts said

82% of all money in circulation is NOT paper. Because it originated between banks giving each other loans. This is called book-money.

50% of all Indians DO NOT HAVE A BANK ACCOUNT. So this is massive push to digitize India’s monetary system. But for what purpose? Stricter surveillance?

“To fully understand the following, it is important to be aware of the Better Than Cash Alliance (BTCA), formed in 2012 to push back the use of cash globally. Founding members are US-institutions who stand to gain most. Those are notably the Bill and Melinda Gates Foundation (Microsoft), Visa, Mastercard, Citigroup and Omidyar Network (eBay). Funding members are also the notorious Ford Foundation and the US government’s development agency USAID. Do keep in mind the acronym BTCA, as it will show up a lot in brackets to flag its members, as their role in Indian demonetisation is described.

  1. In 2013, the year after BTCA was founded, Raghuram Rajan, former Chief Economist of the International Monetary Fund (IMF) in Washington, took over the post of Governor of the Reserve Bank of Inida (RBI), coming directly from the University of Chicago.
    1. One of his first decisions was to set up the “Committee on Comprehensive Financial Services for Small Businesses and Low Income Households”.
    2. He put Nachiket Mor in charge of it, a banker an board-member of the RBI.
    3. In March 2016 the Gates Foundation (BTCA) made Mor head of its India country office. A reward?
  2. Somewhat counterintuitively, the Mor Commission that was to foster financial inclusion of the poor and of rural areas, was heavily dominated by big finance and law firms, with a strong US-bias.
    1. Members included former Citigroup-CEO (BTCA) Vikram Pandit and Bundu Ananth, President of IFMR Trust.
    2. IFMR is an Indian Research Institute, which has many US-Institutions as funders, including Chicago University, USAID (BTCA), Gates Foundation (BFCA), Ford foundation (BTCA), Citi (BTCA).
    3. IFMR is a member of the “Alliance for financial inclusion”, which is financed by the Gates-Foundation (BTCA).
    4. A further member of the Mor Committee was a representative of the National Payments Corporation of India the umbrella organization of payment service providers, which aims to move India to a cashless society.
    5. Another member was credit Rating Agency CRISIL, majority-owned by the US Rating-giant Standard & Poor’s.
  3. In 2015, USAID (BCA) announced a formal partnership with the Indian finance ministry to advance digital payments in India.
    1. The Better Than Cash Foundation is an associated partner to this partnership, as are most of the key BTCA-members individually.
    2. USAID commissioned a report on the payment infrastructure in India and on ways to advance digital payments.
    3. In January 2016 USAID presented the report titled “Beyond Cash”.
  4. In May 2016, RBI announced plans to print a new series of banknotes and announced in August that it had approved a design for a new 2,000 rupee note.
  5. In September 2016, McKinsey Global Institute issued a report titled “How digital finance could boost growth in emerging economies”.
    1. Authors acknowledged “collaboration with the Financial Services for the Poor team at the Bill & Melinda Gates Foundation.
    2. They thanked more than ten Gates-Foundation (BTCA) people for contribution to the report, including Gates-Foundation’s India head Nachiket Mor of Rajan’s Mor-Committee.
    3. In mid-December, seemingly unfazed by ample evidence that taking away cash in India has been the exact opposite of helping the poor and promoting “financial inclusion”, McKinsey-partner Susan Lund and study contributor Laura Tyson published “The promise of digital finance”, making fantastic claims about the advantages of pushing back cash-use in favor of digital, including ten percent higher GDP for countries like India.
    4. They disseminated this piece on the website of Project Syndicate, which is payed for by US hedge fund billionaire George Soros.
    5. It also went to dozens of newspapers worldwide via Project Syndicat.
    6. Co-author Tyson also has relations to Soros via the World Economic Forum.
  6. Also in September 2016, less than four weeks before the surprise demonetization, the partnership between USAID and the finance ministry to advance digital payments was ”taken to a new level” by the creation of the “Catalyst”, with the webadress”.
    1. US-Ambassador Jonathan Addleton said at the occasion that “India is at the forefront of global efforts to digitize economies”.
    2. The CEO of Catalyst announced that the goal was a field experiment to increase digital payments tenfold in one city.
    3. USAID declared, it would finance this initiative for three years.
  7. Catalyst is housed at IFMR, the institute mentioned above, of which Gates Foundation India’s-CEO Mor is a board member, and which relies very much on funding from various members of the Better Than Cash Alliance.

So, is this all done, to help some stupid business-men get richer, at the expense of the poor? I guess so. As usual.

When cash goes down – paypal goes up. That’s what they think. At least.

Who knew?

To conclude that the finance ministry and the prime minister decided on the demonetization assault with no significant involvement of US-institutions, we would need to believe, that USAID, Catalyst and the people at IFMR – mislead by the finance ministry of India – were working on and paying for a trial project to scale-up digital payment in only one city, right up until Modi surprisingly announced the temporary abolishment of most cash in the whole of India. Since a trial in one city alone could only have worked by creating strong  incentives to use digital payments and probably investing in the infrastructure, what Modi announced on November 8 would have made obsolete all single-city plans and preparations of Catalyst, if they had ever existed. We would have to believe that the people at the ministry who knew, and Modi, did not see a need or find a reason to delay that project until it became clear it was no longer needed.If the US government should have been displeased with their agency being ostensibly fooled into planning and paying for a useless project without being informed, they did not show it. A spokesperson of the State Department said, that the move, despite some “inconvenience” for many Indians and visiting Americans was “important and necessary to crack down on illegal actions.”

Whose initiative was It?

Granted, the creation of Catalyst might just have been a clever ruse to be able to prepare the surprise demonetisation without arousing suspicion, because a one-city field-experiment was publicly announced. However, this would make it even more relevant, that Catalyst was a heavily US-influenced operation, paid for by USAID and having grown out of a longer-standing cooperation between USAID, the Washington-based Better Than Cash Alliance and the Indian ministry of finance. 

To assume that the US-government was not informed of the plans stretches belief, given the circumstances. Assuming they have been informed and involved, one could still think, that Modi took the initiative to demonetise India, either in good faith or for more sinister reasons, and simply enlisted help and advice of US institutions. If so, the “help” did not consist in effectively helping to meet the challenge of providing all of India with new mney in a timely fashion. That part went terribly wrong. The only advice that the Better Than Cash Alliance has ever had, is to reign in the use of cash and to advertise the use of digital payment systems. Note that for those who want to push back the use of cash worldwide, the disaster that demonetization was for the majority of Indians, was a benefit, rather than a problem. Worldwide it instilled fear that people and businesses relying solely on cash could experience the same. If Modi and the Indian government should have acted with the supposed interest of the country in mind, and thought that they would get useful, unbiased advice from foreign institutions with a strong and obvious business interest in the abolishment of cash and from a foreign government whose country is home to the companies that dominate digital payment systems globally, then he would have been naïve at the border of imbecile. I will not assume that. The fact that the ground in India was prepared from at least 2013, by a committee of the RBI with very heavy US-links, and then by a formal USAID-finance-ministry partnership, does not lend more plausibility to the narrative, that the initiative was Modi’s.

We will look more closely at the economic arguments and the evidence in favor of financial inclusion and of pushing back cash in a follow-up article.

Did ‘Better than Cash’ coopt vested Indian interests

The hypothesis that the main driver or a main driver behind the demonetization were US interests, does not at all imply that the Indian prime minister and other Indian constituents did not have their own interests associated with it. It is hardly possible to get the elite of a country to do something that goes against their own interests, but it is fairly easy to get them to do something that helps (significant fractions of) them, but hurts the majority of the people. A few possible such interests, some of them quite plausible, I would like to quote from a readers letter:

1) recapitalising the public banks, which were staggering under the weight of bad loans to cronies. Soon after the demonetisation, the state banks waived loans to 63 corporations, including Modi’s close friend and ally, Adani. the entire corporate sector is expected to benefit from lowered interest rates as a result of recapitalization.
 2) there are major local beneficiaries of pushing people onto the cashless system, such as Nilekani and Ambani, who probably played a part in persuading Modi. Nilekani is the key person behind the Aadhar system of equipping every Indian with an ID card, through which they are now required to get food rations, train tickets and other basic services. this system greatly increases the possibilities for controlling the population and crushing dissenters. Ambani is the owner of an online payment platform that has directly benefited from demonetisation.
 3) destroying the informal, cash-based economy of the poor and pushing through retail chains instead. curiously, the big retail chains were well supplied with cash in their in-store ATMs. they experienced a boom immediately after demonetisation.
 5) destroying the informal economy would also ease the process of land acquisition, as indebted farmers would be forced to sell. land acquisition for real estate and other development, a long-standing demand of global capital, has been stalled by grassroots movements.
 6) emptying out the cash coffers of rival political parties. Elections are due in February in several major states. the political process in India has been profoundly corrupted by the loosened financial controls since neoliberal reforms in the 1990s.
 7) another idea that has been put forward is megalomania—Modi wanted to do something dramatic and drastic to push through multiple benefits to his backers, and also pose as a crusader against corruption. incidentally, some recently leaked documents indicate that Modi himself received bribes from a corporate house. even India’s supreme court is too chicken to order an investigation, at least thus far.


Indien will 86% des Bargeldes abschaffen und “digitalisieren” mit dem Argument Korruption und Schwarzarbeit zu bekämpfen.

Die Menschen werden gezwungen Konten aufzumachen.

Anbieter von Handy-Zahl-Systemen bekommen immensen Zulauf.

“Um uns aus dem Griff von Korruption und Schwarzgeld zu befreien, haben wir entschieden, dass die aktuellen 500- und 1.000-Rupien-Noten nicht mehr gültig sind”, sagte Modi. Ein 1.000-Rupien-Schein, bisher die größte Banknote im Land, ist gerade einmal 13,60 Euro wert. Schon um Mitternacht sollte er nichts mehr wert sein. Die größte legale Banknote im Land ist nun der 100-Rupien-Schein – rund 1,36 Euro.

Am Mittwoch stauten sich die Autos vor den staatlichen Tankstellen und Apotheken, die zu den wenigen Stellen gehörten, die ein paar Tage lang noch große Scheine annehmen durften. Den meisten von ihnen ging bereits in der Früh das Wechselgeld aus, was häufig zu lautstarken Auseinandersetzungen führte. Kleinere Geschäfte und Straßenhändler hatten sichtlich weniger Kunden – was angesichts fehlender Geräte für bargeldlose Zahlung auch vorerst so bleiben dürfte.

Bitte unbedingt man rein schauen:

82% des im Umlauf befindlichen Geldes liegt NICHT in Papierform vor. Weil es zum Teil zwischen privaten Banken durch gegenseitige Kredite “entstanden” ist. Das sogenannte Giralgeld.

D.h. scheinbar ist das Papiergeld oder wenigstens noch das Münzgeld “Staatssache”. So als Rest-Macht-Möglichkeit auf das Geldsystem Einfluss zu haben…

Handelsblatt Dr Norbert Häring über: Was es bedeuten würde, wenn das Bargeldes abgeschafft wird… Schweden eher unfreiwillig “dabei”.


wie gerade in Indien am laufen, die wollen 86% allen Papiergeldes aus dem Verkehr ziehen und haben von heute auf morgen die großen Scheine für wertlos erklärt. Es wird zwar erklärt – dass man die alten großen Scheine gegen neue Scheine umtauschen könnte – doch das geht nur wer ein Bankkonto hat und scheinbar auch nicht immer?

50% aller Inder HATTEN kein Bankkonto… jetzt werden diese GEZWUNGEN eines auf zu machen.

Goldbesitz wird pro Person auf 1kg beschränkt – für Männer – für Frauen 500g – vererbter Schmuck ist von der Pfändung ausgenommen.

Neue Banknoten

Noch bis zum 30. Dezember haben Bargeldbesitzer nun Zeit, ihr Geld zur Bank zu bringen oder gegen neu entwickelte Banknoten im Wert von 500 oder 2.000 Rupien zu tauschen, die die indische Notenbank RBI ab Donnerstag versprochen hat.

Bargeld soll jedoch auch danach knapp bleiben:

Gerade einmal 4.000 Rupien (54 Euro) dürfen direkt getauscht werden, der Rest muss auf ein indisches Konto eingezahlt werden.

Anschließend bleiben Abhebungen an Bankomaten auf 4.000 Rupien pro Tag limitiert, wer direkt in die Filiale geht, darf pro Woche zunächst nicht mehr als 20.000 Rupien abheben.

Die indische Regierung erhofft sich durch den Zwang zum papierlosen Geld vor allem ein Ende der Schattenwirtschaft, die verschiedenen Schätzungen zufolge ein Fünftel bis ein Viertel der indischen Wirtschaftskraft ausmacht.”


Gold Besitz wird auf 1kg gedeckelt

Frauen dürfen nur 0.5kg Besitzen – ausser es Handelt sich um Erbstücke.

Was bedeutet das?


Summit backs push for greater transparency in global tax system


09 December 2016

Parliamentarians from jurisdictions around the world today added weight to calls for greater transparency in the international tax system.

Twenty-six Parliamentarians have now signed a concordat calling on governments to support greater tax transparency by multinational companies.

The latest signatories were in London for today’s Global Tax Transparency Summit, hosted by the Committee of Public Accounts and attended by delegates from jurisdictions with a combined population of more than two billion people.

Central to the concordat is an agreement on support for public ‘country-by-country reporting’ to show, for each tax jurisdiction in which multinationals do business, their revenue; their profit before income tax; the income tax paid and accrued; total employment; capital; retained earnings, and tangible assets.

Jurisdictions represented at the summit were Australia, Bangladesh, Belgium, Bermuda, British Virgin Islands, Bulgaria, Canada, Cayman Islands, Czech Republic, Denmark, France, Germany, Guernsey, India, Ireland, Isle of Man, Israel, Jersey, Kenya, Madagascar, Mexico, Moldova, Niger, Norway, Pakistan, Poland, South Africa, Spain, Switzerland and the UK.

Outline programme for future work

Parliamentarians agreed an outline programme for future work, to explore:

  • VAT; taxation and high net worth individuals in sport and entertainment
  • Further work on tax transparency, focusing on those who advise and facilitate companies and individuals
  • Holding a follow-up conference in Canada in 2017, the 150th anniversary of Canadian Confederation
  • Broadening the umbrella of Parliamentarians and other stakeholders scrutinising tax collaboratively
  • Collaborating in real-time on coordinated work across Parliaments

Delegates also took part in four plenary sessions examining global tax transparency, action to combat tax avoidance, efforts to drive change in the international tax system and the impact of tax avoidance on the developing world.

Chair’s comments

PAC Chair Meg Hillier MP said:

“Tackling aggressive tax avoidance and increasing transparency requires sustained cooperation across international borders.

The excellent support for today’s summit, organised and hosted by our Committee, highlights the strength of feeling on these issues and represents an important step towards addressing them.

We have agreed some strong themes to explore in future and more Parliamentarians have signed the open letter to our governments, urging greater transparency of multinationals’ profits and tax.

Our Committee’s work scrutinising government spending, and that of colleagues overseas, is always better when information is in the public domain and civilians can help us hold governments to account.

We want the same opportunity for people to scrutinise the tax affairs of multinational companies.

Businesses should behave like good corporate citizens and pay their fair share of taxes; no business should expect to avoid its duties to wider society without genuine anger from the public.

As Parliamentarians we must now keep up the pressure on our governments to commit to more transparent reporting on multinationals.

We have no desire to set up a whole new bureaucracy but we must be fleet of foot to deliver the action our citizens are increasingly demanding.

Tax avoidance does not respect borders and only by working together can we push forward on these vital issues that affect us all.”

Further information

THE TJN WEEKLY – Friday December 9

Dear Subscriber,

Good news this week from Tax Inspectors Without Borders, who announced this week that their four pilot projects to build capacity with developing nations’ revenue inspectors had netted more than $200m extra tax revenues.

Tax Inspectors Without Borders is a project backed by the United Nations Development Programme and the OECD. Both are now hoping to roll out the project to more countries. We recently did a podcast on the initiative, the link can be found below.

Global Tax Transparency Summit

On Friday, Parliamentarians from around the word met at the Global Tax Transparency Summit, hosted by the UK Parliament’s Public Accounts Committee. The outcome of the summit was to support a call for greater tax transparency from multinational companies.

The summit was attended by parliamentarians from over 20 countries, including some well known tax havens like the BVIs, Isle of Man and Cayman Islands. Clearly, having politicians from some of these havens of secrecy joining the call is good news. Lets hope it leads to some positive action.

LuxLeaks retrial

So lets hope all this positive news carries through into next week, when LuxLeaks whistleblower Antoine Deltour begins his appeal against his conviction for stealing corporate information from PwC.

Given that the information demonstrated how the firm was helping multinationals to avoid their tax obligations, the public interest in this case was obvious. However, the Luxembourg court still sentenced Deltour and another employee, Raphael Halet to a suspended jail sentence.

More information on how to support Antoine can be found here.

The latest from the TJN Blog

Our December 2016 Spanish language Tax Justice Podcast: Justicia ImPositiva, nuestro podcast de diciembre 2016

Welcome to this month’s podcast and radio programme in Spanish with Marcelo Justo and Marta Nunez, downloaded and broadcast on radio networks across Latin America and Spain. ¡Bienvenidos y bienvenidas a nuestro podcast y programa radiofonica! (abajo en castellano). This month: In this December 2016 programme we ask if 2016 was a step forward or […] The post Our December 2016 Spanish language Tax Justice Podcast: Justicia ImPositiva, nuestro podcast de diciembre 2016 appeared first on …
Read more

For rich countries only: A global map of multinationals’ tax avoidance

The introduction of a key policy tool against multinational companies’ tax avoidance has been handled so badly that developing countries are now exposed to worse inequalities. In a new report published today, we call for immediate changes to limit the damage done. In 2003, the Tax Justice Network outlined an important new policy for transparency […] The post For rich countries only: A global map of multinationals’ tax avoidance appeared first on Tax Justice Network.
Read more

Beneficial Ownership and disclosure of trusts: challenging the privacy arguments

On July 22nd, 2016 the French supreme constitutional court ruled on a case brought by a US American citizen resident in France who had created a trust, allegedly to distribute her inheritance. She was contesting moves by France to set up a public register of trusts connected to France in an attempt to tackle tax […] The post Beneficial Ownership and disclosure of trusts: challenging the privacy arguments appeared first on Tax Justice Network.
Read more

Tax justice news from around the web

Image used under the creative commons license - image by Binuri Ranasinghe

Links Dec 9

Africa’s crackdown on tax avoidance nets £204m to boost development The Guardian
Listen to news on Tax Inspectors Without Borders in our November 2016 podcast, here.

BRICS nations vow to automatic sharing of tax information Business Standard

Global public accounts committees unite for tax transparency push Public Finance International

GUE/NGL initiative succeeds in rejecting Commission’s anti-money laundering blacklist
‘Despite new scandals surfacing all the time, well-known offshore jurisdictions are still being ignored.’

Revision of 4th AMLD: Comprehensive Green approach for fighting money laundering in the EU Sven Giegold

The silent man of LuxLeaks fights back Politico
‘Long the forgotten face in the tax scandal, Raphael Halet is finally ready to clear his name.’

Virtual Briefing: Country by Country Reporting Financial Transparency Coalition
With TJN chief executive Alex Cobham

Uganda Revenue Authority Backs Campaign to End Illicit Financial Flows allAfrica / The Monitor

Zara Under Fire as Greens Warn EU Tax Dodging Still in Vogue Bloomberg

McDonald’s to scrap Luxembourg tax structure The Guardian

France’s honest tax system crusader convicted for hiding millions of euros the Guardian

Heard the latest Christmas story? It’s about how UK banks pay all their taxes The Guardian
By TJN senior adviser Prem Sikka. ‘Major financial institutions are involved in routine tax avoidance. But a report by the City of London Corporation and PwC raises more questions than it answers

Complex structures and aggressive tax planning behind the Nicaragua Canal Eurodad

Tax evasion: Tightening the noose Financial Times / MSN
Great round-up of international tax transparency progress, and weaknesses

The U.S. Is a Low-Tax Nation Bloomberg

Cristiano Ronaldo reveals £191m income after tax evasion allegations The Guardian

Links Dec 6

Financing Matters: A toolkit on domestic financing for education Global Alliance for Tax Justice

Panama Struggles to Shed Its Image as a Magnet for Shady Deals The New York Times

African union-led tax justice platforms throw their support behind ICRICT Foreign Affairs

Online discussion “Europe Calling” on „Supporting whistleblowers! Meet Antoine!“, 13 December 2016, 8:00 pm Seven Giegold

Tax dodging by corporations: How can we stop the bad deals?  Fabio de Masi (In German)

Tax Breaks Are Israel’s Bait to Lure Multinational Companies Bloomberg
Read on the Race to the Bottom here  

Cayman Islands allows four days to comment on company beneficial owner registry plan STEP

Family’s $29 Billion Fortune Claim Denied Amid India’s Tax Hunt Bloomberg

Maltese Finance Minister sidesteps Panama Papers inquiry GUE/NGL’s Panama Papers Blog

Trump, Cabinet could avoid millions in taxes thanks to this little-known law The Washington Post

Reaction: British tax haven used in football tax dodge Oxfam
See also: Football Leaks: Ronaldo and Mourinho accused of tax avoidance BBC News, and Footballers’ tax avoidance depends on corrupt global structures Left Foot Forward

Shell companies: Weak UK regulation lets opaque companies persist Reuters
Hat tip: Offshore Watch   

Can trusts still be trusted by wealthy families? Spears
TJN’s John Christensen comments: ‘for people who are really wealthy, inheritance tax has become an optional choice’

U.S. failing to curb money laundering by shell companies: task force report Reuters

Majority of London overseas property owners are registered in tax havens economia


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