Post Demonetization: scenario I

            There is spurt in illegal exchange of currency notes of Rs 500 and Rs 1,000.  Income Tax department had raided caterer and dental implant equipment supplier from Mumbai.  There was news that employees being used for exchange of old notes on the basis of commission.  The tiffin service provider outsourced his 60 employees.  The delivery men exchanged old currency notes over the bank counters many a time; in return, the caterer received a hefty commission.  During raid, IT department recovered Rs 40 lack cash of old notes and Rs 80 lack cash of valid legal tender notes.  Amount of Rs 60 lacks was sized from dental equipment supplier.  He has adjusted his account book by giving backdated receipt of sales to his clients.  Two Axis bank managers were arrested in Delhi.  They were involved in alleged exchange of Rs 40 crore old currencies to new notes.  Across India, IT and ED department are conducting raids after raids.  IT department booked two real estate firms for backdating sale of flats.  The clients are from reputed high income group category.  The IT department has recently detected undisclosed amount of Rs 1.64 crore from Jan Dhan account.  The deposit of Jan Dhan account has increased from Rs 27 thousand crores to more than Rs 72 thousand crores in two weeks time.  The department has initiated action against such account holders.  More than eight crore of cash was seized from Odisha state.  It seems, many players like gold and diamond jewelers, real estate firms, businessmen, bankers and many more have already played major role in illegal exchange of currency.  The government agencies are issuing notices after notices to those who are under suspicion.  A lot number of experts will be required to analysis the suspicious accounts of firm/businessman, where huge cash in hand had declared.  Chartered Accountant of these firms is under scanner.  To check each and every thing will be a hazardous task.  Vehicle checking throughout the country is unearthing the unaccounted money in crores.  It is good that the unaccounted money is making its way into the formal channel.  The Reserve Bank of India will circulate small denomination notes of Rs 20 and Rs 50; the distribution of Rs 500 currency will ease the present crises.  This will ease the burden of availability of small currency.  There is an urgent need to provide relief at rural level, as livelihood has disturbed due to cash crunch.  Even banks have rationalized the notes to the customer; though no such circular is being issued by the bank authority.  Bank Manger has allowed withdrawing of Rs 24,000 amount a week barring medical and other emergencies.      

            Shivraj Singh Chauhan, Madhya Pradesh Chief Minister welcomed the PM demonetization scheme.  While addressing gathering he said that party workers should adapt the cashless technology and spread massage among their constituencies by training the poor among poor masses.  He said the demonetization will break the backbone of terrorism.  The Goods and Service Tax law along with the present policy will tremendously reduce the generation of black money.   Mr Adi Godrej, supremo of Godrej Industry and MD and CEO of Yes bank Mr Rana Kapoor welcomed the PM monetary policy.  Godrej said ‘a cashless economy is trying to achieve too much too soon’.  The policy will have positive impact in medium and long run term, he said.  Mr Kapoor described it as tectonic shift.  ‘Demonetization to remonetization would involve some short-term pain.  The multitude of benefits the economy to accrue in medium to long term’ he stated.  Cashless transaction results into higher accountability, the thing that person with pathological mindset never accepts.  As the cashless transactions are increasing the cyber crimes are also expanding their horizon. 

Serpentine lines are noticed at toll plazas; it happened due to non-availability of small denomination notes.  Daily, toll Plazas are collecting hundreds of crores of cash.  Suggestion is convert manual system of toll collection to e-tolling to avoid long queue.  E-tolling will not only save time and reduce pollution but save fuel cost.  Former Road Transport and Highways Secretary Vijay Chibber said ‘There is a need for a strong push to the FASTag project’.  The amount will be automatically deducted from the account as and when vehicle will pass from the booth.  Union Minister Meghaval said that the new monetary policy will push GDP growth of two per cent as against two per cent fall predicted by most of the economist.