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We have the news that 90% of the scrapped and demonetised Rs 500 and Rs 1,000 notes are back in the banking system. This means that, sadly, there is not going to be a massive dividend to the Reserve Bank of India (and thus government finances, for profits there are fed to government) from the cancellation without compensation of currency that has already been issued. However, we should also note that those same amounts of cash which have been deposited are now inside the reporting system for tax. And undoubtedly there will be some decent portion of those deposits which were formerly black money and which now will be righteously taxed. It’s also worth pondering the actual aim here–not so much to punish the black money holders, but to get them to stop.