The India's ruling party Bhartiya Janata Party (BJP) desires to take benefit of demonetization policy in electoral
politics. If the elections are held in
January and February - Before the X and XII class board examination - the BJP
will likely to sweep the polls, BJP sources said. The TIME Magazine’s Person of Year award is
recently announced. Modi received 18%
votes in reader’s poll well ahead of US President Barack Obama and many global
stalwarts. The party wants to cash the
popularity of Mr Modi. Prime Minister’s charisma
may get eroded and the success of demonetization will not be transformed into
vote bank if elections are deferred.
Two
Axis Bank managers allegedly played major role by accepting two per cent
commission in money laundering racket of Rs 39 crore. More than 3 kg gold bars were retrieved from
their possession, Enforcement Directorate announced. Many more persons were arrested including the
Director of Beagles Marketing who is a daily wager and has no idea about the
illegal activity. In another case, the
CBI has booked two bank officials – Chief Manager of Karnataka Bank and Branch
Manager of Dhanlaxmi Bank – for allegedly facilitating the laundering of
unaccounted money. A fraud of Rs 5 crore
has been detected. It is likely that ED
and CBI are going to conduct many more nationwide raids to unearth illegal
transactions.
Story
of Sambhal district of Western Uttar Prasdesh is an eye opener for policy
makers. There are more than 75 thousand
Jan Dhan accounts in Prathama bank.
Before November 8, a total amount deposited was Rs 44.70 crore and after
the date Rs 73.16 crore. In many
accounts cash of Rs 49,000 was deposited.
Deposits under Rs 50 thousand in Jan Dhan accounts do not attract income
tax scrutiny. Ms Rinku Verma – Rs 49
thousand deposited in Jan Dhan account – said that her employer - Shivam
Varshneya, Rice Mill owner – has given cash for father’s treatment and was
substantiated by the owner. When both
the parties are hand in glove, how the black money is to be traced? A small shopkeeper form Gazipur District of UP
has deposited Rs 27 lacks in his Jan Dhan account on November 11; before that
the amount deposited was paltry Rs 500.
His account was seized by CBI.
The shop owner claimed that the cash belongs to his mother who is saving
money in wardrobe from last 20 years.
Other family members were unaware of the amount. After she came to know about the news of
demonetization, she asked her son to deposit the amount. The story may be true or false. In India, the age old practice is to store
cash and ornaments at home only.
Housewives do keep cash at home; without the knowledge of husband and
that too intentionally. However, it is
true that the Jan Dhan accounts are scrupulously misused, better not to speak
about saving and current accounts.
Crores of unaccounted money has been transmuted to white money through varied
ways and means. Almost fifty per cent of
money in circulation before November 8 was a black money.
The
finance ministry informed the government departments to make e-payment as and
when the amount shall exceed Rs five thousand.
The government asked the shopkeepers to deploy point of sale (PoS)
machine terminals or use different mobile apps as against money
transaction. Digital transaction will
automatically deposit amount in bank account that will facilitate the account
holder to take advantage of different bank schemes. A total of 14 lack different devices are
installed across the country. The
government is trying to reduce cost of point of sale machine. The cost of machine must be attractive enough
for small shopkeepers (1.5 crore) and small and medium businessmen (3.6 crore). It is expected that 10 lack PoS machines will
be installed before the end of financial year.
State Bank of India alone installing 1 to 2 thousand PoS machines per day as against 200
POS machines a year before. The cost of
the machine ranges between Rs 5,000 to 35,000 depends on different features. Many national and international companies are
advertising e-wallet apps; even PSU banks are not far behind. At present, India has two POS terminal per
thousand debit card holders, far lagging behind than emerging economies. ‘India will need 2 crore PoS terminals as
against the current 2 lakh’ RBI Deputy Governor, R Gandhi said. In order to achieve the cashless transaction
goal it will require two years or more.
The
service sector and manufacturing sector affected due to reduction in money
supply. The Nikkei India Services
Purchasing Managers’ Index (PMI) reduced down to 46.7 in November from 54.5 in
October for service sector. As and when
the index goes below 50 indicates sector is not performing well, PMI above 50
means the sector is expanding.
The
sad part of the story is, more than hundred people lost their life from the day
Demonetization policy were declared. In the
recent past, 65 year ex-serviceman died while standing in a queue at
Amritsar; a lady of Aligarh, Uttar
Pradesh immolate herself for failing to exchange six notes of Rs 500. Many were died in long queues across the
country. It is imperative on the part of
government to provide all facilities so as to keep people comfortable when they
are in queue.
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