‘I have put you all in a queue, but this is the last queue to end all the queues,’ said PM Narendra Modi

A, Exceptional Report by: Harbans S Nagokay
Jammu, December 3
At one side; FM ArunJaitley said that ‘Depositing Black Money In Banks Will Not Make It White’ and on other side ‘PM Modi Defends Clampdown On Cash Economy’ today. While defending the crackdown on cash economy that has left businesses, farmers and families suffering; Prime Minister Narendra Modisaid that it was necessary to keep inflation in check and ensure basic amenities for all.
PM Modi’s decision last month to scrap 500 rupee and 1,000 rupee banknotes as part of a crackdown on tax dodgers and Counterfeiters has caused a currency crunch in this country where most people are paid in cash and buy what they need with cash. Then, conversion in plastic money, may; take some time. With a small stock of smaller notes available and new bills of Rs. 500 and Rs. 2,000 in short supply, Indians are being forced to stand in queues outside banks and cash machines to change their old notes. Addressing his party’s election campaign rally in Uttar Pradesh, PM Modi said: “Please support me in curing the disease that has been afflicting this country for the last 70 years.
“I have put you all in a queue. But this is the last queue to end all the queues.”While PM Modi has been praised for his intentions, he is facing flak from political opponents as well as prominent economists such as AmartyaSen and Paul Krugman for sucking 86 per cent of the currency out of circulation virtually overnight.Nobel laureate Krugman on Friday said PM Modi’s decision was “highly disruptive” and would result in “significant” temporary cost for the economy without producing major gains in the long-run.
Officials expect some illicit cash never to be returned and to expire worthless, while other money that is deposited will remain in the banking system. The government’s goal is to encourage the use of cashless forms of payment, a challenge for most Indians who live and work in the informal economy.
Furthermore-Issuing a veiled warning, Finance Minister ArunJaitley said one cannot convert black money into white by merely depositing unaccounted cash in bank accounts as taxes are required to be paid on them.”By just depositing it (unaccounted money), you don’t avoid the responsibility of paying tax,” he said when asked about surge in deposits in banks following withdrawal of high denomination currency notes.
He further said the income tax department is keeping an eye on such deposits.
As per RBI, about Rs. 8.45 lakh crore in scrapped Rs. 500 and 1,000 notes were deposited with banks by November 27.Following the government’s decision to demonetise from November 8 mid-night, people have been depositing these notes in banks.The LokSabha has amended the Income Tax Act to provide for higher tax and penalty on such undisclosed income. The Bill is pending in the RajyaSabha.
As per the amendment, the government will levy a tax of 50 per cent on unaccounted demonetised cash if it is disclosed voluntarily till December 30. After that, a steep tax and penalty of up to 85 per cent will be levied on undisclosed wealth that is discovered by authorities.Replying to a question of long queues for withdrawal of cash at banks, the finance minister said RBI has increased the supply of new Rs. 500 notes and asserted that the situation will improve soon.MrJaitley also discussed the issues concerning demonetisation with the state finance ministers after the GST Council meeting.
Several state finance ministers, he said, demanded relaxation in the Fiscal Responsibility and Budget Management (FRBM) norms as well as an increase in Ways and Means Advances to deal with their public finances.
By all said and done, the fallout from the decision of note-ban is widely expected to impact economic growth this quarter and for several quarters to follow. Opinions, however, vary on the scale of the damage. Besides, PM Modi called for patience until Dec. 30, by when he has promised the cash situation would stabilise, and urged people to shift to electronic transactions.
Now everyone here in this nation is just optimistic toward PM’s last statements saying “I will not let your sacrifice and hardship go waste.”

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