Sk Amer Arafath
Cell: 90599 58038
On November 8th 2016, the PM of India Mr.Narendra Modi was flashed by media saying that he launched Surgical strike on black money in the form of demonetization (Rs.500 & Rs.1000 notes). I would like to draw a point that it was a Nuclear strike but not a surgical strike because the very definition of surgical strike means that the damage done will be very less with great accuracy. But in this case, the damage done was severe taking our progressive economy back to three years and thereby reducing 80-100 basis points of GDP. The term ‘Black Money’is wrong. Money cannot be black or white. It could be Legal or Illegal Money depending on the income disclosed to the govt. We can see the move of government was not pre-planned. The big hit was rural India. This was the golden month for our farmers. What was the very need for the govt to take such a step in this month? They could have wait for next couple of months. It is evident that the demonetization drive was mere the UP & Punjab polls tactic which made suffer everyone. The hypocrisy of the govt and Parliament is that they kept political parties out of Right to Information (RTI) Act ambit and they want common people to be accountable (95% people concentrate only 25% of India’s wealth ; 90% people are in uroganized sector)where one can find no trace of so-called black money. These are mere the daily wage earners, labourers,farmers,etc.,.Instead the govt should attack the corporates and initiate a CAG level inquiry in their tax rebates/exemptions.
Below are the main issues faced by Aam Janta especially rural India.
1) There will be lack of liquidity in short term, so low growth in forthcoming quarters.
2) As transportation will be hit, retail prices will rise and their will be less profits. So tax collection will be low.
3) Banks are busy dealing with customers for exchanging old notes and they are not lending which decreases the lending capacity for business entities thereby resulting exodus in jobs.
4) Real estate will be adverse impact which contributes to the Non-performing Assets (NPA) of banks and other financial companies.
5) Farmers lack investment for the rabi season. So there might be shortage of food supplies.
6) The perishable goods will be wasted because of less consumption as the purchasing power of citizens are curbed down in the former of demonization.
7) Keeping a limit on holding cash is absurd as this is the season of marriages; admissions in foreign countries is about to begin and it will have multiplier effect on consumption.
Measures should be taken by the govt :
1) Strengthen Indirect tax laws.
2) Income Tax should be brought down so that individuals don’t thwart away from paying the same.
3) Bring a provision of ‘Arrest’on IT evasion.
4) Promotes Cashless Transaction.
5) Tax exemption on Card swiping
6) Monitoring real estate transactions
7) Monitoring Gold purchase
8) Introduction of new tax like “Democracy Cess” (0.1%) for public funding of election
9) Develop mobile apps to submit information anonymous by citizens regarding illegal money.
10) Reward to informer and officer who deals with it and that too being anonymous.