We live in interesting times. First, Prime Minister Narendra Modi pressed the button on demonetisation of Rs 500 and Rs 1,000 (high-denomination notes) on Tuesday, November 9, in an 8 pm speech, effectively rendering the old currency useless from midnight the same day. He said the step would deal a death blow to black market operations in the country and also the forged notes in circulation.
The second might be true - given that any forger would need time to copy the new high-denomination notes, which are still in short supply. On the effectiveness of the step in eradicating the black money in the country, though, there is a question. The demonetisation will either bring out - or effectively kill - the unaccounted income held in cash in these currencies. It is, however, anybody's guess as to what proportion of black money is actually held in cash. Respected economists say the bigger chunk is held as assets abroad, or even in property, gold, silver, diamond and other assets in India.
There will be an effect on small traders and others who routinely under-declared their earnings and did a lot of business in cash to evade taxes, but it would let off the big fry who use far more sophisticated methods. Still, in the days to come, we will know exactly how effective this has been in either pulling out undisclosed income or in plugging the loopholes for the long run. By all accounts, the RBI does not plan to shrink the supply of high-denomination notes - in fact, within probably six months, the amount of cash in circulation could match the amount that was vacuumed out. Whether traders will go back to their bad ways or mend is anybody's guess.
Meanwhile, after a lull, Tata Sons again moved to action to remove Cyrus Mistry from all the boards of Tata companies. There are reports that they are also seeking to remove other directors who are perceived to be on Mistry's side. As I had mentioned earlier, this is going to be a long, messy battle and in the short run, no one will come out a winner. It would have been far better if they had sorted out the matters across the table to avoid a bitter, long drawn-out battle in public.
This issue is our Best B-schools special. We have tweaked the methodology to make it more robust and entirely objective. Despite removing the subjective portion of the earlier methodology, it was a surprise to find that the majority of the top B-schools of earlier studies retained their position. It is only when one goes beyond the top 100 schools that major shifts are seen.
As expected, the three oldest IIMs retain their stranglehold on the top positions. Actually, in my opinion, the top 15 schools are all doing so well that it becomes an individual student's choice as to which one to join. Lower down, the choices are easier given the differences in job prospects, teaching, infrastructure and other parameters.