Notes to Myself


November 2016

Lies, damned lies, and statistics – and Modi App Survey

Former British Prime Minister Benjamin Disraeli once said: “There are three kinds of lies: lies, damned lies, and statistics.”

This is so true about Statistics, and the recent survey by Narendra Modi App on Government’s #Demonetisation decision is a classic example of how one can lie with statistics. Selective Amnesia is a virtue, big gift in Politics. Similarly selectively cherry picking few data points and jumping to conclusion is a big quality politicians must have (and which most of them possess). And Statistics is the best tool which helps them do it effectively.

Since PM Modi’s announcement to ban Rs. 500/1000 currency notes on 8th of November 2016 the entire nation is in turmoil. Even after 15 days there is tremendous disruption in the economy . And it seems the Government is feeling the heat. Hence they came up with what they do best – using Social Media tools and publicity mechanism to convey a message that “the entire nation is behind PM Modi in supporting the note ban”. So “Narendra Modi App” – a mobile app through which PM supposedly connects with the “entire nation” – conducted a survey and it was announced that 90-95% people support PM Modi on note ban.

Since the news broke the Twitter is abuzz with “” trend which is trying to expose the “damn lies” of the Survey result. The argument is simple – the survey is “managed” and not representative.

Here are few statistics: There have been ~70 lakh (7 million) downloads of “Narendra Modi App”. Of these half i.e. 35 lakh have been active users (users who access App regularly). Govt announced that total 5 lakh users responded to survey. And 92% people supported PMs decision. Let’s analyze why the Twitter is trolling the survey.

  1. People who downloaded Apps are mostly “Bhakts” or government supporters. Not a representative population of “entire nation”
  2. Of them only 5 lakh (7%) responded. So even “Bhakts” didn’t come out in support of their Boss. Probably that reveals the fake app users
  3. What’s most glaring is how the survey was loaded to lead to only one outcome. There was no option of “No” in responding to the survey. See below

Modi App Survey.png

And that’s why people are trolling Government after they published the survey results.

How to lie with statistics.jpg

This reminded me of Darrell Huff’s book  “How To Lie With Statistics?” which he wrote way back in 1954. Huff  would be very proud of “Namo App Survey” developer! 🙂

The media is also openly criticizing the survey gimmicks. The Financial Express wrote this:

What is alarming is the way Govt is trying to defend this decision. Maharashtra CM said that anybody who opposes PM’s decision is “anti-national”. That is adding insult to injury. We do not need this kind of test to prove our nationalism.

I don’t know what this event will lead to – in terms of Economic prosperity or otherwise, and in terms of Political mileage. But this is certainly creating a divided society…but then it is a hallmark of the ruling party’s politics.

To end it on a lighter note, here is how BBC’s “Yes Minister” TV Series captured how leading questions can lead to a survey outcome you want:

“Narendra Modi App” Survey designer must be a huge fan of Yes Minister, and in particular the above scene 🙂


Chess, Character and Champions

The World Chess Championship in New York has entered an interesting phase. After seven straight draws, we’ve finally witnessed a decisive result at the World Chess Championship.

Sergey Karjakin of Russia, the challenger, claimed the first full-point on Monday against titleholder Magnus Carlsen of Norway. More interestingly, Magnus Carlsen declined to attend the Round 8 post game press conference. FIDE regulations state that every player must attend the post game press conference, otherwise he will be penalized by a deduction of 10% of his prize money.

Magnus has been the undisputed King of Chess World for last few years and is way ahead of Sergey in terms of FIDE Chess Ratings (Magnus is Ranked # 1 with 2853 rating points vs Sergey who is ranked #9 with 2772 rating points). Magnus’ personality oozes confidence , bordering on arrogance. It could be attributed partially to language barrier. It could also be his complete dominance in the world of chess. One cannot know for sure. However it is true that he is a fierce fighter and doesn’t like losing (trait shown by many world champions including Garry Kasparov).

So, how you deal with loss, defeat or failure shows the true personality. Warren Buffett famously wrote in his annual letters “Only when the tide goes out do you discover who’s been swimming naked“. He was referring to the investors who get exposed when markets plunge. The same line can be tweaked and applied to sports personalities.

Heywood Broun, the American Journalist once said: “Sports do not build character. They reveal it.” This echoes with Warren Buffett’s quote. The true personality of a person is exposed when he is down and dusted.

Garry Kasparov was a sore loser. Check how he reacted after a wrong move against Vishy Anand

And here’s how Kasparov reacted to an organizer:


The latest addition to this list is Magnus Carlsen. So far Magnus had amazing run and this side of his was never revealed. But check how annoyed he looks during an earlier press conference:

And to take it a step further, Magnus declined to join the press conference after losing Game 8 yesterday.

The real match begins now! With just 4 games left, Magnus must fight back hard to win  and level scores. Karjakin, on the other hand needs to defend strongly and avoid a losing posing – and he has done that so well in this match so far!

Let’s see what more is revealed by Magnus’ character in coming days.

I tend to be anti-establishment and bet on the Challenger or an underdog. And I would love to watch Magnus dethroned for one more reason – Magnus defeated Vishy Anand (and defeated very badly) twice in earlier World Chess Championship matches. Being an Indian and more importantly being a Vishy fan, I would love to see someone tearing Magnus apart! Let’s see how it goes…


Magnitude of Demonetization (?)

Prime Minister Modi announced on 8th November 2016 the decision to withdraw highest value currency notes vix. Rs. 1000 and Rs. 500 and replace them with new Rs. 2000 and Rs. 500 notes. RBI also mentioned that new Rs. 1000 notes would be issued soon. In that sense this decision cannot be termed as “demonetization” in true sense. It is more of new currency notes replacing the old ones.

This step will help flush out existing black money,but it may not stop  creation of new black money. There are other steps needed to prevent that – movement towards cashless economy. But with poor infrastructure and reach of cashless payment systems (online payment, credit/debit cards, mobile wallet etc) and with high costs of using these means it would take long time to become majority cashless economy. I booked tickets online on BookMyShow and they charged 10%+ as “Convenience Charges”…that is ridiculous. The Govt should abolish by law all such charges; and should in fact provide incentives for using cashless systems and levy a charge for using cash.

As My IIM Professor, Prof. Jayanth Verma has explained in his blog “It is not money but credit that makes the world go round“, cash should be used only when you run out of credit. So unless government simultaneously brings in measures to incentivize cashless payment systems and penalize cash transactions the black money creation is not going to reduce/stop.

Anyways, let’s see what government does on this front and when.

I read information about magnitude of demonetization and wanted to share it with some perspective. Here is the split of different currency denominations in circulation till 8th Nov:

Currency Distribution.png

So the currency denominations cancelled by PM Modi accounts for 86% of total currency (by value). It is worth a whopping Rs. 14 Lakh Crore. And that explains the chaos and cash crunch we are facing today even after 1 week of cancelling Rs. 500/1000 currency notes.

Imagine if government were to truly demonetize i.e. remove highest currency notes and not replace them with new ones, then Govt would need Rs. 14 Lakh Crore of currency in denominations of Rs. 100 or lower. If entire new currency is of Rs. 100, Govt would have to print 5-10 times more notes (500 = 5 x 100, 1000 = 10 x 100). i.e. 14,000 Crore Rs. 100 currency notes!!!

Just to put this in perspective, if the printing press prints 100 Crores notes a day (which itself is a ridiculous assumption), it would take 140 days i.e. over 5 months! If there are lower currency denomination notes it would take even longer to replace the cancelled currency notes.

Are you getting the magnitude of “demonetization” (or currency replacement decision – whatever you want to call it)?

Had Government taken into account the massive logistics? I hope they had. If so, could they have started printing currency notes earlier? Were there secrecy issues in doing that?

I am not sure if we will know these details ever.  But it would be interesting to track this decision and see if it yields some success in “War on Black Money”.

And the war has just begun! More action to come against “Benaami” property and Gold and other forms of Black Assets.


राग धनखलास


राग धनखलास 

संगीत प्रेमींसाठी नवीन राग – मोदी घराण्याकडून


हा राग आम्हाला सातवाहन कालीन “पैशाची” भाषेतल्या एका कागदपत्रात सापडला. त्यानंतर “मोडी” लिपीत त्याचे भाषांतर झाले असावे. आणि शेवटी आजच्या लोकप्रिय “मोदी” घराण्याने त्याला राजमान्यता दिली


रागाची मांडणी 

“म-नी” वर्ज्य स्वर

आरोह – सा रे ग प्प

अवरोह – ग प्प सा रे


वैशिष्ट्ये: हा राग दिवसातल्या कोणत्याही समयी गायला जाऊ शकतो. याला वेळकाळाचे बंधन नाही. या रागाची रचनाच अशी आहे की आधी तारसप्तकात असलेल्या धनदांडग्याचें सूर नंतर मध्य आणि त्यानंतर मंद्र सप्तकात लोप पावतात. लक्ष्मीपुत्र धनिकांनी हा राग ऐकल्यास त्यांच्या अंगाची लाही लाही होते. अशी या रागाची ख्याती पूर्वापार आहे. राग दीपकासारखा. याची चाल ओळखून बरेच जण राग “धन”श्री मधून राग “माल”कंस आणि मग अखेरीस कृष्णधन गंगाजलात फेकून ऐश्वर्याची “भैरवी” केव्हा गायला लागलात, हे त्यांचे त्यांनासुद्धा समाजात नाही. राग “धनखलास” असा हा वैराग्यप्राय आणि विरक्तीयुक्त राग आहे. राग “कृष्णधनखलास” हा त्याचा तीव्र अविष्कार आहे.





अर्थक्रांती’चे प्रणेते अनिल बोकिल यांच्याशी दिलखुलास गप्पा

The recent demonetization of Rs. 500-1000 currency notes was proposed by ArthaKranti’s Anil Bokil since year 2000.


First watch Anil Bokil’s old interview  and then watch his latest one below


Anil Bokil with Raju Parulekar on Samvaad



अर्थक्रांती’चे प्रणेते अनिल बोकिल यांच्याशी दिलखुलास गप्पा


काळा पैसा आणि सावळा गोंधळ

रु. ५०० आणि १००० च्या नोटा रद्द झाल्या पासून समाजमाध्यामातून (म्हणजे सोशल मीडिया बरं का) खूप विनोद माहिती, माहिती-वजा-इशारे, माहिती-वजा-धमकी इ. यायला लागले आहेत. आणि काळा पैसा ह्या विषयावरून सगळीकडे सावळा गोंधळ चालू झाला आहे.
पेट्रोल मध्यरात्री पासून २० पैशानी वाढलं की पेट्रोल भरायला रांगा लावणाऱ्यांचा आपला देश…त्यामुळे इतक्या मोठ्या घोषणे नंतर गोंधळ होणारच होता.
लोकं ठिकठिकाणी लपवून ठेवलेल्या नोटा बाहेर काढायला लागले आणि दबक्या आवाजात इतरांकडे किती नोटा दाबून ठेवलेल्या आहेत याचा अंदाज घ्यायला लागले आहेत. “आपण इथे काय घेऊन आलो होतो…आणि काय घेऊन जाणार आहोत…” छाप कीर्तन ऐकणाऱ्या आजीबाई सुद्धा बटव्यातून, स्वयंपाकघरातील डब्यांच्या खोबणीतून लगबगीने पैसे काढत आहेत. लोकांकडे दाबून ठेवलेला पैसा पाहिला की मला कमल हसन च्या “पुष्पक” चित्रपटातला तो भिकारी आठवतो. छान कपडे घातलेल्या कमल हसनकडे पैसे नसतात आणि तो भिकारी त्याला कुठून कुठून पैसे काढून दाखवतो आणि त्याला हसतो. माझी अवस्था कमल हसन सारखीच आहे. लोकं लगबगीने नोटा बदलायला जात आहेत आणि माझ्या पाकिटात १००० ची एक आणि ५०० ची एक नोट…बस्स 😦
आता अशी एकेक नोट बदलायला जायचं आणि स्वतःचं हसं करून घ्यायचं त्यापेक्षा माझ्या डोक्यात एक वेगळा विचार आला. मी माझ्या नोटा बदलणारच नाही. सगळ्या लोकांनी नोटा बदलल्या की पुढे ५-१०-२० वर्षांनी ह्या जुन्या नोटांना दुर्मिळ म्हणून खूप महत्व येईल…त्यात रघुराम राजन ची सही असलेली शेवटची नोट वगैरे मुळे जास्तच मागणी असेल. तेव्हा मी माझ्या नोटा बाह्रे काढणार!
कशी वाटली कल्पना? त्यामुळे तुम्ही आता रांगेत उभं राहा…मी मजा बघतो! गरीब असल्याचा असा एक फायदा…
मला तर महाराष्ट बँक शाखेत वगैरे ठिकाणी काय अवस्था असेल ह्याच्या नुसत्या कल्पनेनीच त्या लोकांची कीव आली. महाराष्ट बँक हे ज्येष्ठ नागरिकांनी ज्येष्ठ नागरिकांकरता सरकारी खर्चाने चालवलेले एक विरंगुळा केंद्र आहे अशी माझी समजूत आहे. तिथे काउंटरच्या अलीकडे आणि पलीकडे दोन्ही ठिकाणी ज्येष्ठ नागरिक किंवा त्यांच्या तडफेचे मध्यमवयीन नागरिक असतात. म्हणजे कर्मचारी पण ज्येष्ठ आणि ग्राहक पण. कुठल्याच गोष्टीची घाईगडबड नाही. निवांत कारभार…आता आधीच अशी अवस्था असेल तर नोटा बदलून द्यायचे जास्तीचे काम आल्यावर तर कर्मचारी अजून वेळ घेणार. म्हणूनच कदाचित त्यांच्या शाखांमध्ये (विरंगुळा केंद्रात) घड्याळ नसते, फक्त कॅलेंडर असते…उगाच कर्मचारी वर्गावर ताण नको! असो…
केवळ १० च दिवस आधी ह्याच ५००-१००० च्या नोटांची थप्पी लावून दिवाळीत लक्ष्मीपूजनाला त्यांची पूजा केली होती. आता अचानक त्यांची किंमत संपली. माणूस गेल्यावर कसा अनुभव येतो तसं एकदम जाणवलं. ह्या पूर्वी १९७८ साली नोटा रद्द केल्या होत्या म्हणे…पण तेव्हा मी… नव्हतोच. आणि तेव्हा १००० च्या नोटा रद्द केल्या होत्या (म्हणजे आत्ताच्या १०,०००+). त्यामुळे तेव्हा फार लोकांना फरक पडला नसेल.
ह्या वेळेस सरकारनी लोकांची गैरसोय होऊ नये म्हणून काही अत्यावश्यक ठिकाणी जुन्या नोटा चालतील असे सांगितले आणि लगेच त्या ठिकाणी लोकांची झुंबड उडाली. सरकारी इस्पितळे, पेट्रोल पंप, सरकारी  वीजबिल, फोनबिल इत्यादी.
त्यातच काही चतुर लोकांनी “स्मशानभूमीत जुन्या नोटा स्वीकारल्या जातील” असं वाचून तिकडे गर्दी केली. पण जुन्या नोटा चालतील म्हणजे बदलून मिळतील असं नाही तर त्या विधीची “दक्षिणा” म्हणून फक्त जुन्या नोटा स्वीकारतील हे ऐकल्यावर त्या चतुर लोकांचा चेहरा पडला…आणि त्यांच्यात “स्मशानशांतता” पसरली.
सामान्य लोकं रांगेत उभं  राहून नोटा बदलून घेत आहेत हे पाहून गहिवरून येतं. श्रीमंत उद्योजक , राजकारणी, साखरसम्राट, कृषिसम्राट  (ह्यांना पुणे परिसरात आदराने अनुक्रमे साखरमहर्षी आणि कृषीमहर्षी असं म्हणतात!) वगैरे लोकांचं बरं असतं. त्यांच्या स्वतःच्या बँक, पतपेढ्या, सहकारी पतसंस्था वगैरे असतात! म्हणजे मागच्या वाटेने ते सगळ्यात आधी ५०-१०० च्या नोटा काढून घेणार!
काही सोनार मागील तारखेच्या सोनेखरेदीच्या पावत्या देऊन जास्त दराने ५००-१००० च्या नोटा स्वीकारायला पण तयार आहेत असे मेसेज आले. म्हणजे काहीही केलं तरी लोकं त्याच्या २ पावले पुढेच! धूम चित्रपटात नाही का चोर हा पोलिसांपेक्षा अद्ययावत, चपळ आणि चलाख असतो…पण पुलंनी म्हटल्याप्रमाणे सोनार लोकांचा आम्ही फक्त नावच ऐकतो. फक्त १-१ नोट बदलायला सोनं घेणं म्हणजे प्रोसेसिंग फी रद्द केली म्हणून गृहकर्ज घेण्यासारखे आहे. पण बरेच लोकं तसं पण करतात म्हणे…
आता नक्कीच काळा पैसा निर्माण करायचे आणि साठवायचे नवीन मार्ग येतील. पण आपल्याला ते कधीच समजणार नाही. आपण आपले डब्यांच्या मध्ये, फ्रीजच्या कव्हरच्या आत, देवघरात इ. ठिकाणी आपल्या ऐपतीप्रमाणे काळा (किंवा “सावळा”, “गहू वर्णीय” इ.) पैसा साठवत राहणार…आपली धाव तेवढीच.
शेवटी एक शंका: आफ्रिकेत काळा पैसा बाहेर काढण्यासाठी काय करत असतील? तिथे सगळाच पैसा “काळा पैसा” असतो का? आता हा प्रश्न वर्णद्वेषी नाही…एक अत्यंत निरागस, निरुपद्रवी, निर्व्याज, निष्कपटी, निर्मळ, निर्विकार… नाही निर्विकार नाही…निर्मळ  पर्यंतच…तर असा हा प्रश्न आहे. चू.भू.द्या.घ्या.

Demonetization and Fiscal Deficit

PM Modi’s “Surgical Strike on Black Money” on 8th November 2016 surprised the whole nation. Things are still chaotic after 3 days and will remain so at least for a few weeks.

Many messages and articles are being written about the effects of this huge demonetization initiative. One of the messages said: “Government of India is expecting 30-40 thousand currency notes will not be exchanged; which RBI will pay as special dividend to the Govt and help reduce Fiscal Deficit”

There were few queries by friends who didn’t clearly understand the correlation. Let me try to explain with my limited knowledge.

A very basic form of Balance Sheet of a Central Bank looks as follows:


Currency notes are issued by the central bank (Reserve Bank of India) and appear on Liability side of the Balance Sheet. A currency note is a promise by the RBI to redeem equivalent sum of money to the person who bears that note.

The currency note mentions: “मै धारक को XYZ रुपये अदा करने का वचन देता हूं ” OR “I promise to pay the bearer the sum of XYZ rupees”.

So it’s an obligation for the RBI and hence a liability.

Government of India has cancelled the current Rs. 500 and Rs. 1000 currency notes from 9th November 2016 and advised the citizens to deposit or exchange the notes through banks before 31st December 2016. Thus the current 500/1000 notes would “expiry” on 31st December i.e. they would cease to carry any monetary value; which in turn means that the “RBI Promise” would expire too.

Now suppose people, for whatever reasons, do not exchange currency notes by 31st December, what would happen to these notes? They would lose their value. Also, the RBI’s promise to redeem that money would also end. This means that the RBI would get to keep that amount. The liability of currency notes would end.

Assets = Liability + Owners’ Equity.

In this case, the assets remain the same but the liability (of un-returned currency notes) goes down? So to balance the equation the Equity would go up. This would be in the form of “Other Comprehensive Income” or OCI.

And since Government of India is the only shareholder of RBI, the RBI can pay the amount to Govt of India as dividend. This dividend (additional revenue) would help government reduce the fiscal deficit.

More write-ups on currency demonetization soon…


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