The fumes that have arisen ever since PM Narendra Modi made the demonetisation announcement on 8 November refuses to abate. The public has been standing in long queues ever since with many having to return empty handed, some being given less than their requested amounts and most ATMs dispensing only Rs 2000 notes while many went dry.
Over the weekend, the trouble just heightened for the common man as customers rushed to ATMs to withdraw their salary credited just a day or two back. The queues before ATMs were lengthier and stretched beyond late night at certain places.
Meanwhile, supporters and those opposing the scheme continued their war of words. Here’s a round-up of what happened over the weekend:
Need clear tax laws to prevent black money creation: Niti chief
Terming taxation laws in the country as ‘ill-defined’, Niti Aayog vice-chairman Arvind Panagariya called for removing ambiguities in them so as to do away with “discretion of the tax officer”. He also said that demonetisation of high value currency is just one step to combat black money, and more needs to be done. “Tax reform is really important to curb black money,” he said at a panel discussion here.
Retailers asked to accept old Rs 500 note for recharges: COAI
Amid complaints about non-acceptance of old Rs 500 notes for mobile recharges at some places, cellular operators body COAI has said the companies have given strict guidelines to accept these notes from customers but retailers and distributors cannot be forced. COAI Director General Rajan Mathews said that operators have provided strict guidelines to their distributors and retailers for accepting and processing Rs 500 demonetised notes so that no inappropriate activity, contrary to the objectives of the government, takes place. “However, these retailers and distributors cannot be forced to do something they do not want to do, if they believe the process is tedious.
Depositing black money in banks will not make it white: FM
Issuing a veiled warning, Finance Minister Arun Jaitley 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.
Goyal describes demonetisation scheme ‘100 percent success’
Power Minister Piyush Goyal described the decision to demonetise currency notes “100 per cent success” and said money which was not kept in bank accounts has come into formal economy and now is traceable. “We have never imagined that (black) money will not be deposited in banks. We have given 50 days time to deposit (old currency notes of Rs 500/1,000) money,” Goyal told reporters.
Kerala FM terms demonetisation as ‘national calamity’
Kerala Finance Minister Thomas Isaac described the Centre’s decision to demonetise old Rs 500 and 1,000 notes a “national calamity” which has put the nation in a turmoil. “There is going to be a severe downturn. Even if you take 2 percent (decline in GDP as suggested by former prime minister Manmohan Singh)… it means something like loss of production of Rs 2.5 lakh crore…,” Isaac said, adding that the Centre’s move is now impacting almost all sectors of the economy. He dubbed it as a failed exercise, saying Prime Minister Narendra Modi is shifting the goalpost to cashless economy.
Petrol pumps get into digital overdrive, play up wallets
Making a push to promote digital payment post demonetisation, petrol pumps across the country have installed infrastructure to accept not just credit and debit cards but e-wallets and mobile wallets as an alternative to cash. Also, over 4,800 petrol pumps across the country are dispensing Rs 2,000 per card a day through POS machine swipes and have dispensed Rs 65 crore in the past two weeks.
Aiyar says Modi bungled ‘big time’ on note ban implementation
Noted journalist Swaminathan S Anklesaria Aiyar criticised the note ban, saying Prime Minister Narendra Modi has ‘bungled on a big scale’ so far but added he may still come out successful with some doles to the poor. He also warned that nobody has fully gauged demonetisation’s impact on the economy. Blaming Modi’s ‘lack of trust’ in anyone for the poor handling of the demonetisation move, he said it was done in great secrecy with even his own senior Cabinet colleagues not kept in the loop. “Modi does not trust his own Cabinet or anyone else, due to which he was incapable of preparing it well. The result is that it has been bungled on a very big scale,” Aiyar said.
RuPay card usage jumps 118 pc in 1st week of demonetization
RuPay card usage jumped by over 118.6 percent in the week following demonetisation that took effect from 8 November midnight while the overall debit and credit card transactions recorded an increase of 70.5 percent. According to RBI data, the usage of RuPay card at POS terminals soared by as much as 200.6 per cent to 46.6 lakh transactions during November 9-15. This compares with 15.5 lakh swipes during November 1-8.
Two-day seminar by CAIT to educate traders on e-payment
Seeking to educate traders about digital payment framework, a two-day seminar was organised by an umbrella body of traders to ease them in transitioning to a different transaction format. “With the kind of developments happening in the country we as traders will have to look for ways to enhance acceptance of digital payment to shift from traditional cash-based economy,” said Praveen Khandelwal, Secretary General, CAIT.
Bank unions seek Jaitley’s intervention to end cash-shortage
Two large bank unions on 2 December demanded immediate intervention of Finance Minister Arun Jaitley in ending the acute cash shortage in the system following the demonetisation of high-value notes last month. In a letter written to Jaitley, All-India Bank Employees Association and All-India Bank Officers Association said: “You (Jaitley) are very well aware of the problems being faced by the bank staff and customers after 8 November (when demonetisation was announced). Even after so many days we find that problem of acute cash shortage persists due to lack of lower denomination notes and non-functional ATMs,” the letter said.
Rs 2.5 lakh crore won’t come back into banking system: SBI
State Bank of India has estimated that money worth Rs 2.5 lakh crore may not come back into the banking system post demonetisation of high-value notes. On 8 November, the government banned banknotes of Rs 500 and Rs 1,000 worth over Rs 14 lakh crore from the economy. As per the SBI analysis, the market estimate of Rs 14.18 lakh crore currency – excluding cash with banks — is based on March 2016 data while in reality it should be based on data available as on 9 November, a day after demonetisation was announced. SBI noted that going by data as on 9 November, the amount of high currency denomination notes was Rs 15.44 lakh crore (excluding cash in the banks), an increase of Rs 1.26 lakh crore compared to the March figure.
Cash pain remains as demand outstrips supply
Shortage of cash continued to make things difficult as ATMs ran out of money quickly even as banks rationed valid notes to meet requirements of as many customers as possible. There were reports suggesting that bank branches from across the country did not get sufficient cash to take care of pay day withdrawals. While RBI placed weekly withdrawal limit of Rs 24,000 per person, bank branches on their own have further lowered the ceiling to make cash available to more people. The ATMs too did not come to the rescue either as most went dry soon after being loaded with cash, given the huge pent-up demand. Many ATMs were dispensing mainly Rs 2,000 notes.
Demonetisation: 27 senior PSU banks officials suspended
In a major crackdown on bank employees involved in irregularities post demonetisation, as many as 27 senior officials of various public sector banks have been suspended and six others transferred to check corrupt practices. The suspensions come amid reports of Income Tax authorities conducting search and seizure in many places, including one at Bengaluru where Rs 5.7 crore cash in new currency notes was recovered from two businessmen.
India Ratings lowers GDP forecast to 6.8% post demonetisation
India Ratings today lowered its GDP forecast for 2016-17 to 6.8 percent from 7.8 percent earlier, stating that the demonetisation drive will lead to an erosion of Rs 1.5 trillion this fiscal. “We have revised GDP growth forecast for 2016-17 to 6.8 percent, 100 basis points lower than earlier projection of 7.8 percent. The downward revision is a fallout of the disruptions caused at various levels in the economy due to the de-legalisation of banknotes from November 9, which according to our analysis can cost economy a Rs 1.5 trillion,” it said.
First Published On : Dec 5, 2016 12:10 IST
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