THE Government has introduced demonetization of Rs 500 and Rs 1,000banknotes in order to eradicate creation of black money, end to corruption and stop funding to anti-national elements. “The process was necessary to rescue the economy from the clutches of black money. Demonetisation is one step in a continuous process to clean the economy,” said Mr Anil Bokil, Chairman of the Artha Kranti Pratishthan and a social activist while talking on the topic ‘Arthkranti, the unraveling of the demonetization mystery, changing taxation landscape and digitised economy – the way ahead’. The programme was organized by the VIA Economy and Finance Forum.
The demonetization move was suggested by Artha Kranti, an NGO based in Pune. The need for high denomination currency notes above Rs.100 was not required. A report by the World Bank mentioned that 70% of Indians spent on an average $2 per day. “Demonetisation is a correction model and not a development model. Compliance is always against human nature and that tax evasion creates black money,” he said. He suggested the abolishment of all types of taxes like direct and indirect, scrapping high value notes, setting an upper cap for cash transactions and making the people adapt to transact through the banking system and pay a transaction tax. People were always running after money due to insecurity in the system.
The mode of purchasing power was being changed due to demonetisation. According to Bakil, if the Government bans a particular value, it would have to print the exact replacement in the next smaller value denomination. The transition should be a smooth process. Explaining the ideal transition to first abolish the existing taxation system, except for Customs or Import duties, all the transactions above Rs 2,000 should be routed through the banking channel that would attract a Bank Transaction Tax (BTT) of two per cent, deducted at source. The Government and the local bodies would get a share of the tax, which the banks transferred after deducting their fee. Cash transactions would not attract any tax. The second one was to withdraw high value currencies in phases so that the highest denomination available was Rs.50. In the final phase, all cash transactions above Rs.2,000 should be restricted. Above this limit, there would be no legal protection. Cashless transactions would flush banks with huge amount of money. The interest rates in the country would come down and give a level-playing field to the domestic manufacturers. “The demonetization was overdue and necessary to strengthen economy,” he added.
Mr Atul Pande, President of VIA gave the welcome address. CA Sachet Badge, Convenor of VIA Economy and Finance Forum introduced Mr Anil Bokil. Present were Mr O S Bagdia, Vice President of VIA and Mr Rohit Agrawal, Chairman of Economy and Finance Forum. CA Naresh Jakhotia, Joint Secretary proposed the vote of thanks.