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Demonetisation Day 50: Why Arun Jaitley is wrong in painting a rosy picture of economy

Union finance minister Arun Jaitley is a good communicator. Well articulate and sophisticated in his arguments to convincingly present a case to any audience. On Thursday, Jaitley demonstrated this ability yet again when he listed out the gains of demonetisation to the economy citing data to say why the critics of note ban are wrong. Following is the main points Jaitley made in his address yesterday.

In all the categories (of indirect tax) till 30 November, there has been a significant increase in tax collection. Till 19 December, direct tax mop-up rose 14.4 percent, indirect tax grew 26.2 per cent, central excise is up 43.3 percent percent and service tax by 25.7 percent, Jaitley said.

Secondly, life insurance and mutual fund sales, tourist arrivals and fuel consumption have gone up. The flow into mutual funds was increased by 11 percent. “Assessment can be unreal but revenue is real,” the FM said.

Finance Minister Arun Jaitley. PTIFinance Minister Arun Jaitley. PTI

Finance Minister Arun Jaitley. PTI

Jaitley is missing the point here or is simply being selective in choosing his data to assess the impact of demonetisation over the last 50 days.

First of all, the above sets of numbers do not reflect the segment that has been hit badly by the demonetisation — the small traders/ service providers and those in informal economy.

Small traders with annual turnover less than Rs 1.5 crore and service sector with turnover of less than Rs 10 lakhs are not reflected in the indirect tax net. If one talks about impact on account of demonetisation, shouldn’t the segments that got hit most be factored in first?

Second, November typically shows a spike due to festive season. This will reflect in the indirect tax numbers too, including the excise duty. The full impact of the demonetisation will come with a lag.

Already there has been a slowdown in indirect tax collection in November, when the kitty swelled by 21.8 percent as against 34.6 percent in October. Similarly, growth in excise duty collection declined to 31.8 percent in November against 40.9 percent in October. Now , look at the monthly data on service tax. The growth in November slipped to 13.3 percent from 66.5 percent in October. (see the table below).

indirect tax collection table - Dec 30, 2016indirect tax collection table - Dec 30, 2016Third, the sudden spike in fuel consumption at a time when the overall economic activities are slow is dubious. Part of the reason could be that black money hoarders were smartly using the government-permitted window to dump the old notes in petrol pumps.

Fourth, FM Jaitley ignored the pessimistic GDP forecasts from various forecasters, including that from the Reserve Bank of India, which has lowered the full year forecast to 7.1 percent from 7.6 percent even while stating that it hasn’t fully taken into account the full impact of the demonetisation resulted cash crunch. Private forecasters are even more pessimistic.

Fifth, the spike in mutual funds and insurance premiums isn’t a good set of data while discussing the impact of demonetisation. According to the Insurance Regulatory and Development Authority of India’s (IRDA) 2015-16 annual report data, the life insurance penetration in India is 2.72 percent. Similarly, as a share of GDP, mutual fund penetration in India is still around 7 percent. The section of the population in the cash economy who are affected by the demonetisation has nothing to do with spike in life insurance premiums and mutual funds. Also shouldn’t the spike in insurance premiums also take into account the digital incentives rolled out by the government?

Sixth, Jaitley was also silent about the number of jobs lost in the informal sector post demonetisation. There is no official estimate for this. But, various estimates say about 4 lakh jobs could be lost due to the note ban.

According to the Centre for Monitoring Indian Economy (CMIE), unemployment rates rose to 6.1 percent in the week of 4 December and further to 6.6 percent in the week ended 11 December and then to 7 percent in the week ended 18 December. The impact comes with a lag and we need to wait for fresh numbers. The full impact of the demonetisation resulted cash crunch will only unfold in the next few months. If the cash crunch prolongs, things can get worse .

Seventh, Jaitley missed crucial indicators such as PMI data when assessing the economic situation. The consumption story has taken a hit. The services sector PMI sharply fell to 46.7 in November from 54.5 in October — that is the biggest monthly drop since November 2008, just two months after the global financial crisis hit the economy following the US investment bank Lehman Brothers going bust in September. The manufacturing PMI too fell with the index shrinking to 52.3 in November from October’s 22-month high of 54.4. These signals are hard to ignore. Here again, one need to wait for further data.

The bottomline is this: Full impact of demonetisation on economy will be visible only with a lag. May be next few months should offer more clarity. What FM Jaitley has done is presenting selective set of data and use that to prove demonetisation critics wrong and, finally, conclude that demonetisation has helped the economy in 50-days. This is too early an assessment and an incorrect presentation.

(Kishor Kadam contributed to this story)

First Published On : Dec 30, 2016 15:30 IST

Demonetization: Jaitley misleading people with his statements, says Congress

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Congress Party has accused Finance Minister Arun Jaitley of quoting wrong facts and misleading the people of this country with his statements with regard to demonetization.”It is very surprising that Arun Jaitley is giving such a peculiar statement, saying that there was no unrest, but it has been reported that that more than 100 people have died in the country,” Congress leader Pradeep Bhattacharya.”I cannot believe that Arun Jaitley does not know this thing. Definitely he knows this thing in spite of that he said something wrong and he thought if I say something wrong people will believe it, but now, people have started thinking that he is saying untruth and trying to mislead the people of the country,” he added.Bhattacharya said he can very emphatically and very clearly say that people who have died and those who are suffering due to present situation will never forgive this type of painful situation.Responding to Jaitley’s statement that the people are supporting the demonetization initiative, the Congress leader said, the finance minister clearly knows that people are not supporting them.”What the people would do, people are hesitating, they are showing their grievances very clearly, they have shown it very clearly that that they cannot accept this kind of functioning by the Government of India,” he said.

Kirti Azad terms Arun Jaitley ‘inefficient’, seeks his resignation

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Continuing his tirade against Arun Jaitley, suspended BJP leader and MP Kirti Azad on Sunday termed the Finance Minister as an “inefficient” person and sought his resignation holding him responsible for the hardships faced by the common man post-demonetisation.”It is Arun Jaitley who is bringing disrepute to the government… It is he who is responsbile for the hardships faced by the common people post-demonetization. The Finance Minister is an inefficient person and is also not an economist. He should resign,” he told reporters here.”Our Prime Minister has taken a decision (of demonetizing high value notes of Rs 500 and Rs 1000) and banks are indulged in converting crores of black money into white.In whose jurisdiction these banks come? These bank come under the ambit of the Finance Ministry,” said Azad, who represents Darbhanga in Lok Sabha.The former cricketer was suspended by party chief Amit Shah on December 23 last year for publicly targeting the Finance Minister for “irregularities” in DDCA, of which Jaitley was the President for 13 years till 2013.He had also criticised Jaitley two months back saying that those “rejected” by the electorate have not only been made ministers but have become “all in all” in the government and the party.Azad attacked the government, saying it would have made sufficient arrangements and preparations to deal with the situation post-demonetisation “had its intentions been clear”.”The government’s policymakers do not have practical knowledge. Their all assessments are based on far from reality,” he alleged.While frequent raids are being conducted across the country to catch people having black money, why such raids were not conducted earlier by the Finance Ministry, Azad wondered.Cashless transaction system, which is being aggressively promoted and popularised by the government, seems to be difficult to succeed in a country like India, Azad said and added that e-payment is not cent per cent safe and secure.Demonetization has its adverse impact on farmers, labourers, workers, small traders, jewellers, he said adding that even vegetable growers are not getting fair price of their produce.”There are people (in the party), who have been rejected by the people in the elections, have not only been made ministers (in the Union government) but have actually become ‘sarve-sarva’ (all in all) both in the government and in the organisation,” Azad had told a press meet at his residence on October 23, 2016 in his Lok Sabha constituency Darbhanga.He was apparently referring to Jaitley who had lost in the 2014 Lok Sabha polls but was made Union minister.

Demonetisation: Money deposited in banks has lost its earlier anonymity says Finance minister Arun Jaitley

New Delhi: Describing the currency being deposited in banks following last month’s demonetisation of high-value notes as money that has lost its earlier “anonymity”, Finance Minister Arun Jaitley on Sunday said these funds now available with the banks have strengthened the Indian banking system.

File photo of Arun Jaitley. PTI

File photo of Arun Jaitley. PTI

“The money that is being deposited in cash form after demonetisation, now the anonymity of that money is gone,” Jaitley said at the DigiDhan Mela event here to promote cashless transactions.

“When this money comes into the system, the banking system becomes stronger and there are funds available for rural development, social welfare programmes,” he said.

“Money in the system becomes part of the taxation system too.

The long-term benefit of this move is that the shadow, the parallel economy, which was not taxed, of which there was no accounting, which was not answerable, that is now becoming part of the economic system,” the Finance Minister said.

First Published On : Dec 25, 2016 18:21 IST

In less-cash mode, govt mulls tighter cheque bouncing law

<!– /11440465/Dna_Article_Middle_300x250_BTF –>After demonetization, the government is now trying to fight the ‘demons’ that could come in the way of ensuring a less-cash economy. As part of this exercise, the government is examining a proposal that could lead to sterner action in cheque bouncing cases.With more people using non-cash modes for transactions, the government is facing demands, particularly from traders’ bodies, for a legal system that makes payments made through cheques more secure, according to sources.If the proposal is accepted, the government could come out with a legislation to amend the law pertaining to cheque bounce cases. Among the measures that government is examining is that the defaulter will be given a month’s time, after which, if the matter is not settled, it would attract arrest even before the case is settled, the sources said.At present, dishonour of a cheque, in view of inadequate funds in account, is a criminal offence under Section 138 of the Negotiable Instruments (Amendment) Act, 1881, and can be punishable with imprisonment for a term which may extend to two years or with fine of twice the amount of the cheque or both.Sources said that despite the law, there were several instances when the payee was made to wait to get the money for years after a cheque bounced. There were 18 lakh cases of cheque dishonour pending in courts across the country till 2014 end, according to a reply in Lok Sabha. While Maharashtra topped the list of such pending cases, it was followed by Gujarat, Rajasthan and West Bengal.The proposed amendments to deal with this issue, which are yet to get the final stamp of approval, could be brought in the budget session of Parliament in February. The objective is to cut down litigation and act as deterrent to defaulters.The traders, who traditionally have been BJP supporters, have expressed concerns about the problems of cheque bouncing, particularly at a time when more and more people were adopting non-cash mode of payments, the sources said.Ghanshyam Aggarwal, former co-convenor of the BJP’s traders cell, said traders’ apprehensions on various issues after demonetization, like the problems they faced due to the limit on cash withdrawal have been conveyed to Finance Minister Arun Jaitley.Earlier this year, the government had notified the Negotiable Instruments (Amendment) Bill, 2015, to allow filing of cheque bounce cases in a court at the place where it was presented for clearance and not the place of issue. Litigants had to sometimes travel long distances to different places from where cheques were issued and not honoured.

GST council meeting: FM Jaitley ‘trying best’ for 1 April rollout even as logjam continues

GST council meeting: FM Jaitley ‘trying best’ for 1 April rollout even as logjam continues

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New Delhi: Finding no common ground on the issue of dual control or cross empowerment that deals with assessee jurisdiction, the Goods and Services Tax (GST) Council’s 7th meeting that came to an end on Friday raised grave concerns about its 1 April implementation date while Finance Minister Arun Jaitley saying that he was trying his best.

Finance Minister Arun Jaitley. PTI file photoFinance Minister Arun Jaitley. PTI file photo

Finance Minister Arun Jaitley. PTI file photo

“I am trying my best (on deadline of 1 April). I don’t want to hasten the process of discussion and don’t want to delay the implementation,” Jaitley said at a press briefing after the Council meet ended.

The Finance Minister however said: “There was no issue raised on dual control today as we were working on legislations.”

The drafts of Central GST (cGST) and the compensation law have been mostly approved with the only portions relating to dual control being left out, he added.

Jaitley said that the two principle issues that still remain before the Council are Integrated GST (iGST) and cross empowerment.

“In iGST, definition of territory of states is pending. And the division of authority between assessing authorities of Centre and states is pending. The two issues will be taken up together at the next meeting on January 3-4,” he added.

First Published On : Dec 23, 2016 18:05 IST

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Two-day GST Council meet to end today: Key points over the vexed dual control issue

The two-day GST Council meet that began on Thursday (22 December) and will continue today would take forward the discussion on the remaining 7 chapters of the model GST law.

The council headed by Finance Minister Arun Jaitley, which is meeting for the seventh time so far, will also take up the dual control issue and try to iron out differences on the vexed issue of jurisdiction over assessees in the new indirect tax regime.

Consensus has so far eluded on the model GST law in the previous meetings of the all-powerful GST Council. The subsequent GST legislations — CGST, IGST and compensation law — could not be introduced in the Winter session of Parliament that ended last week, and this has threatened the April 2017 rollout target of the GST.

Experts now say that implementation of GST should be postponed by three months to July next year as industry would need time to prepare their IT infrastructure.

Representational image. ReutersRepresentational image. Reuters

Representational image. Reuters

Although, the Centre plans to implement the GST from 1 April, due to Constitutional compulsion the GST now could be rolled out by 16 September next year as the existing indirect taxes will come to an end, and it would not be possible for either Centre or the states to collect indirect taxes.

Day one of the two-day Council meet ended on Thursday with no discussion on dual control but discussed the GST bills.

However, Friday’s meeting will be important as the integrated GST Bill will discuss the contentious issue over the dual control of assessees. Besides this, the three GST bills – Central GST (cGST), Integrated GST and State Compensation Law – need to be approved by the Council before they can be tabled in the Parliament.

Failure to get a consensus on the issue would make it impossible for the government to implement the ambitious indirect tax reform from its target date of 1 April 2017, said a report in the Mint.

Already, finance minister Arun Jaitley has been emphasising that the luxury of time is not available for the GST implementation for the reason that if 1 April 2017, is the first possible day it can be implemented, then the last date also is constitutionally defined as 16 September, 2017.
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“So the discretion as to when to implement is only five months and 16 days and that’s why we don’t have the luxury of time because after five months, the curtains will come down on the old taxation powers,” Jaitley had said earlier.

The dual control has been a sticking point between the Centre and the states, which has so far delayed consensus amongst the council members.

Here are the key points over this vexed issue.

1) The government wants to weigh on the pros and cons on the issues of cross empowerment to ensure single interface under GST, which will subsume excise, service tax, VAT and other local levies.

2) Dual control pertains to the issue of administration of transactions above Rs 1.5 crore. At the September meeting, it was decided that states would have exclusive jurisdiction over transactions below Rs 1.5 crore. For transactions above this amount, it was decided that a mechanism would be worked out to ensure that the same transaction would not be subject to dual audit/inspection by the centre and the state. This has resulted in tug of war between the Centre and states and has become a contentious issue.

3) State governments of Uttar Pradesh, West Bengal, Uttarakhand, Tamil Nadu and Kerala want exclusive control over small taxpayers below Rs 1.5 crore threshold. While the Centre has agreed to forego control on goods, but it is not yielding on services.

4) The GST council also arrived at an option of two proposals– horizontal division and vertical division to overcome the issue. a) Horizontal Division means tax payers would be divided both for administrative and audit purposes based on a cut off turnover. Those with a turnover over Rs 1.5 crore would be administered both by the Centre and states, while those with below Rs 1.5 crore would be administered solely by the state. b) The Vertical Division based on ratios assigns tax payers to a tax administration, Centre or state, for a period of 3 years for all purposes including audit. Tax payers could be divided in a ratio which would balance the interest of the Centre and the state, both with respect to revenue and spread of numbers.

5) The Centre, however, feels that horizontal division would be lopsided as 93 percent of Service Tax assessees and 85 percent of the VAT tax payers have a turnover below Rs 1.5 crore.

6) Last month, GST Council had failed to reach any conclusion on the dual control issue as states objected to non-availability of updated data on assessees of service tax, excise and VAT.

7) The updated figures shared by the Centre with the states shows the likely taxpayer base in GST would be 107 lakh, of which states account for 67 percent (71.7 lakh) and Centre is estimated to account for 33 percent (35.3 lakh). There are around 81.4 lakh VAT dealers, out of which active dealers are 66.5 lakh. For service tax, there are 38 lakh assessees, out of which 26 lakh are active assessees, while there are around 4,00,000 assessees for excise. Around 4,00,000 taxpayers are common to the Centre and the states, The Indian Express report said.

With PTI inputs

First Published On : Dec 23, 2016 12:56 IST

Election Commission to ask I-T authorities to look into finances of 200 parties

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Election Commission is set to write to the Income Tax authorities asking it to look into the finances of over 200 political parties it has ‘delisted’ over a period of time for not contesting elections.The Commission has, over a period of time, identified various parties which have not contested polls since 2005 and has ‘delisted’ over 200 of them.The poll panel believes that most of them exist on papers to help people convert their back money into white by accepting donations.In the next few days, the Commission will send the list of the delisted parties to the income tax authorities seeking action against relevant laws if they are found to be involved in money laundering.While the poll watchdog has the mandate to register a political party, it lacks power under electoral laws to deregister any party.
ALSO READ Government to check misuse of tax exemptions by political parties: Arun JaitleyAs its demand to get power to deregister a party is pending with the Law Ministry, the Commission used its powers under Article 324 of the Constitution to delist parties for being dormant and not contesting elections for a long time.There are over 1780 registered, but unrecognised political parties in the country. Besides, there are seven national parties — BJP, Congress, BSP, TMC, CPI, CMI-M and NCP — and 58 state parties.
ALSO READ EC recommends govt to amend laws on IT exemption, anonymous donations for political parties Seeking to stem flow of black money in elections, the Commission has proposed a slew of electoral reforms but most are pending with the government.

DNA Morning Must Reads: Explosion in Mexico fireworks market, India’s longest road tunnel & more

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Mexico: At least 27 killed, 70 injured in fireworks market explosionAt least 27 people died and 70 were injured in a massive, multi-colored explosion that leveled a fireworks market outside the Mexican capital on Tuesday, leaving it a charred wasteland. Read moreModi hits right electoral notes: Chandigarh, Maharashtra shrug off note recall woesThose who were surprised that despite long queues, there had been no popular backlash against demonetization may have received some answers from the results of the recent civic body elections. Held in Maharashtra and Chandigarh, the comfortable victories acquired by the BJP in these two places, and the hostile reception accorded to UP chief minister Akhilesh Yadav by spectators, who had come to cheer the junior hockey team in Lucknow on Friday, summed up the positive mood amidst the public for the saffron party. Read detailsBuilt at a cost of Rs 3,720 crore, India’s longest road tunnel ready to be commissionedIndia has joined the league of extraordinary nations by constructing the longest road tunnel in the country on the strategic Srinagar-Jammu national highway. Built at the cost of Rs 3720 crores, the nine-kilometre long Nashri road tunnel is expected to be commissioned early next year. Read moreNo scrutiny on deposit of old notes if total amount paid in one go: JaitleyAfter a flip-flop over rules for depositing illegal old high-value currency notes amounting to more than Rs 5,000 in banks, finance minister Arun Jaitley on Tuesday assured that there were sufficient new notes with Reserve Bank of India to replenish the demonetized Rs 500 and Rs 1,000 currency bills. Read moreHong Kong to withdraw visa free entry facility for Indians from JanuaryIn a setback to Indian travellers, the Hong Kong, a special administrative region of China, has withdrawn the visa-free facility for Indians and they will now have to complete a pre arrival registration from January. Read more

Government to check misuse of tax exemptions by political parties: Arun Jaitley

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Government plans to set a threshold criteria for political parties to enjoy tax exemptions to check money laundering by outfits that do not contest elections, Finance Minister Arun Jaitley said on Tuesday.He said the Revenue Secretary has been asked to look into the issue in the wake of Election Commission’s recommendations in this regard. Jaitley’s remarks at a Times Now event assume significance in the context of the Election Commission’s recommendations to the Government to amend laws to bar tax exemption to parties that do not contest elections and win seats in Lok Sabha and Assembly polls and to ban anonymous donations above Rs 2,000 to political parties.”I can point out one is invisible donation which Election Commission says is anonymous and the second is when political parties got exemptions. There are about 40/50/60 political parties which effectively contest elections in Centre and the states, (but) you have a large number of political parties which got registered not for contesting election but for availing tax exemption. “Now this part is easier to tackle. I have already asked the Revenue Secretary to look into this and therefore we will have to put a threshold criteria so that we are able to eliminate those which are not real political parties but only for money conversion which have come in,” Jaitley said.He said many political parties do not contest elections but only accept donations and convert money. “I have already told the Revenue Department to look at them and therefore some threshold criteria could be fixed and number of these could be eliminated,” Jaitley added. Jaitley underlined the need for making political funding as transparent as possible, saying donations must be smaller in size but huge in number. “Political funding is necessary, it should be smaller in terms of denomination but larger in its spread. And therefore not creating a quid pro quo and it should be absolutely transparent,” he said.And eventually it may be worthwhile to try and make efforts only for genuine political parties to get those benefits then start moving towards donations predominantly in the manner, he said regretting that electoral reform initiated during Vajpayee Government were not followed up by the UPA. He further said that once the country transforms into a less cash economy, the donors of the political party won’t have the kind of money in future to donate. “And they are going to straight away tell the political parties you are the ones who brought this change and therefore don’t expect us to give any invisible funding. We will fund you but we will fund you by cheque. And that’s how it should be,” he said.

Govt will impose limits on tax exemption for political parties, says Arun Jaitley

New Delhi: The central government plans to set a threshold criteria for political parties to enjoy tax exemptions to check money laundering by outfits that do not contest elections, Finance Minister Arun Jaitley said.

Finance Minister Arun Jaitley. Reuters file imageFinance Minister Arun Jaitley. Reuters file image

Finance Minister Arun Jaitley. Reuters file image

Jaitley said the revenue secretary has been asked to look into the issue in the wake of Election Commission’s recommendations
in this regard. Jaitley’s remarks at a Times Now event assume significance in the context of the Election Commission’s recommendations to the government to amend laws to bar tax exemption to parties that do not contest elections and win seats in Lok Sabha and Assembly polls and to ban anonymous donations above Rs 2,000 to political parties.

“I can point out one is invisible donation which Election Commission says is anonymous and the second is when political parties got exemptions. There are about 40/50/60 political parties which effectively contest elections in Centre and the states, (but) you have a large number of political parties which got registered not for contesting election but for availing tax exemption,” he said.

“Now this part is easier to tackle. I have already asked the revenue secretary to look into this and therefore we will have to put a threshold criteria so that we are able to eliminate those which are not real political parties but only for money conversion which have come in,” Jaitley said.

He said many political parties do not contest elections but only accept donations and convert money. “I have already told the Revenue Department to look at them and therefore some threshold criteria could be fixed and number of these could be eliminated,” Jaitley added.

First Published On : Dec 20, 2016 22:25 IST

DNA Evening Must Reads: From India’s win in Chennai Test to BJP-SAD’s victory in Chandigarh Municipal polls

<!– /11440465/Dna_Article_Middle_300x250_BTF –>1. Ahead of Punjab elections, BJP-SAD alliance sweeps Chandigarh Municipal Corporation polls The BJP-Shiromani Akali Dal alliance on Tuesday attained clear majority in the Chandigarh Municipal Corporation polls winning 20 out of the 26 wards. BJP won in 20 wards, rival Congress 4 and Independent one, an election office spokesman said. Read more here.2. Germany: Angela Merkel says Berlin Christmas market attack likely a ‘terror act’A man was arrested under suspicion of ploughing a seven-tonne truck through a Christmas market in the heart of Berlin, killing 12, has been named as Naved B, a 23-year-old asylum seeker of Pakistani origin. Read what Merkel said here.3. RBI’s currency stock can last beyond December 30: Arun Jaitley”There was full preparedness. There was not a single day when RBI had not released adequate currency to banks. There was a certain level of currency that was to be released and there was full preparedness for it,” Jaitley told reporters. Read his full statement here.4. IND vs ENG: Virat Kohli and Co win Chennai Test, equal Sunil Gavaskar’s 3-decade-old recordRavindra Jadeja ripped the heart out of England’s batting order to bowl India to a thumping innings and 75-run victory in the fifth and final test on Tuesday. Read more here.5. EU accuses Facebook of giving misleading information during WhatsApp takeoverThe European Commission has charged Facebook Inc with providing misleading information during its takeover of the online messaging service WhatsApp, opening the company to a possible fine of 1 percent of its turnover. Read more here.

Demonetisation: This explanation by Yogendra Yadav for delayed cash deposit is bang on

Political activist and academic Yogendra Yadav has given an explanation to his bank that many harried customers, now hurrying to the bank, would want to give to their banks for making delayed deposits.

In the hard hitting declaration he submitted while making a “small deposit”, Yadav has said that he was waiting for the queues to end to approach the bank and that he saw no reason to offer any special explanation for his decision.

“I see no reason to offer any special explanation for the same [for making the deposit now]. I normally like and wait for the queues to end. I was assured by the Prime Minister,the Finance Minister and the RBI that there was no need to rush to the banks and that I had till 30 December for making any deposit. I believed them,” Yadav has said in his crisp letter.

Yadav’s explanation comes a day after the finance ministry and RBI brought out a notification saying that the customers can make deposits worth more than Rs 5,000 of old Rs 500 and Rs 1,000 notes only once until 30 December now and that they will also have to explain why they did not do so before hand.

Yogendra Yadav. PTIYogendra Yadav. PTI

Yogendra Yadav. PTI

Later on Monday finance minister Arun Jaitley had clarified that the customers need not give explanations if they are making the deposits in one go. He said bank officials will question only if a customer is making deposits repeatedly.

Explaining the rationale behind the move, the finance ministry had said the decision was taken as “it is expected that, by now, most of the people would have deposited such old notes in their possession”. However, one reason, which was not mentioned in the release but is widely known, is the government’s suspicion that a few tax evaders may be laundering their ill-gotten wealth before the deadline ends by using proxies to make deposits in banks.

There is also assumption that the government may be trying to reduce deposit gathering at banks after the demonetisation, which has already surpassed all estimates. Going by the pace of deposit accrual, there are fears that the final number may prove the entire demonetisation exercise a futile one as a higher-than-expected figure would mean return of the black money into the system.

The latest directive, however, came as a shock to many as it goes against the promise that Prime Minister Narendra Modi gave while making the demonetisation announcement on 8 November. He had then said that nobody needs to panic as there is time until 30 December to make deposits of old Rs 500 and Rs 1,000 notes. This promise was repeated in many government advertisements and also by other ministers to calm down the public.

Those honest customers who waited patiently until the queue shortens at the bank branches are now at the receiving end of the new directive. Read in this context, Yadav’s explanation is bang on.

First Published On : Dec 20, 2016 17:22 IST

Jaitley says deposit any amount of banned notes in one go, escape queries; confusion compounds

New Delhi – After tightening rules for depositing old Rs 500 and Rs 1,000 notes, finance minister Arun Jaitley on Monday night said no questions will be asked if any amount of junked currency is deposited in one go but repeated deposits may raise queries.

This is in clear contradiction to the Reserve Bank of India notification in the morning, which said customers depositing more than Rs 5,000 will have to satisfactorily explain why they did not do so early on, even if it is just once.

With nearly Rs 13 lakh crore out of the Rs 15.4 lakh crore worth of Rs 500 and Rs 1,000 junked already deposited in banks, the government has changed rules to mandate that individuals can deposit over Rs 5,000 in old currency bills only once until December 30 and that too after explaining why it had not been done so far.

Finance Minister Arun Jaitley. PTI file photoFinance Minister Arun Jaitley. PTI file photo

Finance Minister Arun Jaitley. PTI file photo

Explaining the rationale behind the move, Jaitley said all exemptions to certain sectors and utilities, which had been allowed to accept the banned currency post demonetisation, ended last week and all those in possession of the old notes are supposed to deposit them with banks.

“Anyone who has old currency notes is not allowed to trade in them. He can only go and deposit them with banks,” he said.

With a view to curtail queues at banks, holders are encouraged to deposit the entire holding in one go, rather than going repeatedly.

“If they go and deposit with bank any amount of currency no questions are going to be asked to them and therefore the Rs 5,000 limit does not apply to them if they go and deposit it once.

“But if they are going to go everyday and deposit some currency, same person, that gives rise to suspicion that where is he acquiring this currency from. In that event a person may have something to worry about. Therefore everyone is advised whatever old currency you have please go and deposit it now,” he said.

However, the morning notification from the RBI had said that the those customers depositing more than Rs 5,000 will have to face the questioning by the bank officials.

“Tenders of SBNs in excess of Rs 5,000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning tenderer, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised in CBS to that effect so that no more tenders are allowed,” the RBI notification said.

The latest statement by the finance minister will only add to the confusion of customers of the worried customers, who have already started queuing up in front of the banks to deposit their old notes. Many of them could have waited patiently for the rush at banks to decline to deposit their cash as the government had time and again promised that the deadline for depositing any amount is 30 December.

However, Jaitley justified the move to restrict the deposits saying there is no scope now for earning any old currency because all exemptions have been waived and it makes sense to go deposit all the holding in one go, Jaitley said. “This is the objective of the order passed today (on Monday).”

After banning old Rs 500 and Rs 1,000 notes on 8 November, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till 30 December. There was no limit on the quantity or value of the junked notes that could be deposited.

However, the government on 17 December issued a gazette notification putting restrictions on deposits henceforth.

“The deposits of old notes of Rs 500 and Rs 1,000 denominations have been reviewed by the government from time to time. Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession,” an official statement said.

With a view to “reduce the queues in the banks”, the government said it has now been decided that “amounts exceeding Rs 5,000 in old notes can be deposited only once between now and December 30, 2016.”

“The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier,” the statement said.

Amounts of Rs 5,000 or less may continue to be deposited with banks in the customers account, as at present.

“However, cumulative deposits exceeding Rs 5,000 between December 19 and December 30, 2016 will be as per the procedures advised by the RBI in respect of deposits exceeding Rs 5,000,” it said.

The Reserve Bank of India (RBI) too came out with deposit guideline stipulating that restrictive conditions will also apply on the cumulative deposit of such notes in a single account when it exceeds Rs 5,000.

However, the defunct currency up to any amount can be deposited under the new black money amnesty scheme, PMGKY.

First Published On : Dec 20, 2016 08:32 IST

Arun Jaitley clarifies that political parties enjoy no exemptions from demonetisation rule

Finance Minister Arun Jaitley has clarified that the government has not made any changes to the laws, and there aren’t any exemptions granted to political parties post demonetisation. A statement released by Jaitley’s office said there was no change made to the taxation laws (Second Amendment) Act, 2016, which came into force on 15 December, 2016.

Arun Jaitley. PTI file imageArun Jaitley. PTI file image

Arun Jaitley. PTI file image

On the controversy regarding tax scrutiny of political parties, Jaitley said, “This is a complete media creation and there are no changes made in the law in that regard. Has a single change made in the last two months or so or in the last two-and-a-half years with regard to taxation of political parties? The answer is ‘No’.”

“Nothing has been done, whatever was the existing system which has been existed for the last 15 years is continuing and if somebody creates a political party for the purposes channelising funds, then obviously the law will step in,” he said.

“I implore all journalist friends to be fully outraged against any step of the government, if it is not against corruption. But in equal measure, I would also implore them to do adequate research before jumping the gun. Under Section 13A of the IT Act, 1961, political parties have to submit audited accounts, income and expenditure details and balance sheets,” he said.

“Post demonetisation, no political party can accept donations in Rs 500 and Rs 1000 notes since they were rendered illegal tenders. Any party doing so would be in violation of law. Just like anyone else, political parties can also deposit their cash held in the old currency in banks till the 30 December deadline provided they can satisfactorily explain the source of income and their books of accounts reflect the entries prior to 8 November,” he added.

“And if there is any discrepancy in the books or records of political parties, they are as liable to be questioned by the Income Tax authorities as is anyone else. They enjoy no immunity whatsoever. There is no question of sparing anyone, and the political class is no exception. In fact, PM Modi is setting a new example of propriety in public life, by asking all MPs and MLAs to submit their bank account details post demonetisation. We would like to urge the other parties to do the same and prove their intentions against corruption,” Jaitley said.

With inputs from PTI

First Published On : Dec 17, 2016 22:14 IST

DNA Evening Must Reads: Modi accuses Indira, 50% tax on undisclosed money, and more

<!– /11440465/Dna_Article_Middle_300x250_BTF –>1. Indira Gandhi sold out India by ignoring Chavan’s call for demonetization in 1971: PM ModiPM Modi alleged that Indira Gandhi sold out India by ignoring advice to demonetize, Prime Minister Modi said, ‘She told her finance minister YB Chavan: are no more elections to be fought by Congress.’ Read more here.2. Demonetization: SC transfers petitions to 5-judge constitution benchThe Supreme Court bench hearing the petitions against demonetization transferred the matter to a five judge constitution bench on Friday and stayed all matters pertaining to various High Courts. Read more here.3. Putin gave Obama clear response on allegations of hacking during US election: ReportThe Kremlin said on Friday that President Vladimir Putin had given President Barack Obama “a really clear response” to US allegations that Moscow had interfered in the US presidential election by hacking Democratic Party organisations. Read more here.4. Govt says ’email us about black money info’, 50% tax to be imposedPeople can give information about conversion of black money to the government email address created to get such information, stated Revenue Secretary Hasmukh Adhia. He announced that unaccounted cash can be disclosed under Pradhan Mantri Garib Kalyan Yojana (PMGKY) from December 17 2016 till March 31 2017. Read more here.5. No official estimation of black money before or after demonetization announcement: JaitleyThere is no official estimation of black money either before or after November 8 — the day government announced scrapping of old Rs 500 and Rs 1,000 notes, Finance Minister Arun Jaitley said on Friday. Read more here.

Congress ‘scandalous record’ making it uncomfortable with Modi govt’s anti-corruption campaign: Jaitley

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Launching a scathing attack on Congress, Finance Minister Arun Jaitley on Tuesday said the party’s “scandalous record” is making it extremely uncomfortable with the Modi government’s anti-corruption campaign of which the demonetization of high value currency is a cornerstone.Junking of old Rs 500 and Rs 1000 notes, he said, will help the world’s fastest growing major economy to move towards less cash economy and digital payments that will help shore up tax revenues and check evasions.Besides, restrictions on cash spending together with mandatory furnishing of PAN will help bring down the level of corruption, he said, adding that the transient problems arising from demonetisation are being addressed by rapidly replacing the junked currency with valid banknotes.
ALSO READ Demonetization effect: Bank credit shrinks by Rs 61,000 crore Amid daily barbs by Congress vice president Rahul Gandhi against Prime Minister Narendra Modi, Jaitley said the party during its 10 year continuous rule from 2004 to 2014 did not take a single step either against corruption or black money.Corruption scandals – ranging from 2G spectrum scam to coal block allocation to Commonwealth Games to deal with AugustaWestland for procuring VVIP helicopters – peaked during the UPA regime, he alleged.
ALSO READ Demonetization to have positive impact on economy: Adi Godrej”Each of the scandals which is even today discussed in public space belongs to that period. Given this scandalous record, it is not surprising that Congress party is extremely uncomfortable with anti corruption campaign that the NDA led by Narendra Modi has launched,” Jaitley told reporters here.High denomination notes, as percentage of total currency in circulation, increased from a mere 36 per cent to over 80 per cent during UPA regime, he said in oblique reference to ill-gotten money usually being hoarded in high denominations.
ALSO READ Modi’s vision of cashless economy left the poor ‘cashless’: Rahul Gandhi on demonetization”There are economic costs of dealing in cash, there are social costs of dealing in cash. These are the costs which system has to bear,” he said.Demonetization, he said, is part of the system overhaul by the NDA government.”It is our strategy that from high cash dominated economy we should become a less cash economy where the amount of paper currency comes down,” he said.Cash will exist but there would be greater digital payments.”Notwithstanding some transient problem which people have to face, we are now rapidly completing remonetization exercise. Everyday RBI is injecting a large amount of currency into the banking system as part of its remonetization exercise. Significant amounts are going to be injected in next three weeks which are gradually bringing the pressure down,” he said.

You may soon have to pay more for safer trains

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Railways has decided to increase passenger fares for raising its resources in order to create a special safety fund. The proposal for total grant of funds for creation of the same has been rejected by the Finance Ministry, sources said. According to the new plan, a safety cess will be levied to generate funds for strengthening track and upgrading signalling system and elimination of unmanned level crossings among other safety-related works to prevent mishaps.Earlier, Railway Minister Suresh Prabhu had written a letter to Finance Minister Arun Jaitley seeking Rs 1,19,183 crore to create the special Rashtriya Rail Sanraksha Kosh for undertaking various safety works. Sources said the proposal has not been accepted by the Finance Ministry which has asked railways to raise its own funds by increasing fares.The Finance Ministry has, however, agreed to provide 25 per cent of the total amount required for creating the special safety fund.“Though, the Railway Minister is not in favour of raising fares at this juncture when passenger bookings are falling and fares of AC-2 and AC-1 are already on higher side, the reluctance of Finance Ministry to provide a bail-out package has left the minister with no option,” a source said.According to the plan, the cess on Sleeper, Second Class and AC-3 will be higher while it will be marginal for AC-2 and AC-1. Though, a final decision in this regard is yet to be taken and modalities are still being worked out, sources said.

Demonetization leaves a trust deficit, consensus eludes GST

<!– /11440465/Dna_Article_Middle_300x250_BTF –>With the trust between the government and the Opposition parties at a low ebb, thanks to feud over demonetization, the crucial Goods and Services Tax (GST) seems to be headed for a delay, that could well see it missing the April 1, 2017 deadline.This was apparent from the lack of consensus at the GST Council meeting—represented by ministers and officials of Union and state finance departments—on Sunday, and the decision to call off Monday’s sitting.The Council was looking to pass four proposed laws—Central GST (CGST, state GST (SGST), integrated GST (IGST) and Compensation Act—in the ongoing winter session that ends on December 16.With Finance Minister Arun Jailtey informing that the discussions on the legislations were initiated but would require more time and that the next meeting would be held on December 22 and 23, these Bills can now be presented only in the Budget session.“The discussion is moving quite satisfactorily. Hopefully, in the next meeting we will be able to clear them. Next sitting was tomorrow, but some of the states’ representatives wanted to return in view of the Eid,” said Jaitley.On whether postponement and failure to finalise the draft Bills would result in the government missing the April 1 deadline, Jaitley said: “The Budget session starts in January. Our target is April 1. If April 1 is the first possible date when it can be implemented then the last day is also constitutionally defined as September 16, 2017. We don’t have the luxury of time because after five months and 16 days, curtains will be down on the old taxation powers”.Kerala Finance Minister Thomas Isaac said it was demonetization which had “eroded the mutual trust and the cordial environment”.“I come from Kerala, where the Centre’s demonetization is destroying its entire cooperative structure. Co-op sector accounts for more than one-third of bank deposits in Kerala and you (Centre) expects me to come and have a handshake on GST. So well, it’s their (Centre’s) own making,” said Isaac.MS Mani, senior director, Deloitte India, believes April 1 date for implementation of the proposed unified indirect tax was not completely ruled out by the outcome of Sunday’s meeting but it did point to a likelihood of its delay.He said that in all the discussion on date, the Council seems to have forgotten classification of goods and services under different rate brackets, which have been finalised. “Trade and industry are eagerly waiting not only for the date of introduction of GST but also for the rate application to the products and services manufactured by them,” he said. The Deloitte tax expert said it was sad to see an important economic and tax reform being swept by the political storm caused by demonetization.“Political reasons are determining the fate of GST, which is not the correct thing, because ideally GST is an economic and tax reform, and economic and tax reforms should not be dictated by political compulsions,” he lamented.

Cashless economy: Here is why experts aren’t upbeat on Jaitley’s digital bonanza

‘Discount’ was the bait that Finance Minister Arun Jaitley used repeatedly in his speech on demonetisation in a bid to push people towards digital payment modes, a month after Prime Minister Narendra Modi made an announcement to annul Rs 500 and Rs 1,000 notes.

At Firstpost, we spoke with personal finance expert, Jitendra P Solanki, founder, JS Financial Advisors, a financial planning firm to decode the positives and the negatives of the speech of the FM. Solanki said that what is perplexing about the announcement is that the Finance Minister has not made it clear that the discounts being offered is for a limited period or not. “To be able to enthuse more people to get on to digital mode of payments, the government must ensure deep penetration of banking facilities across the country, besides good internet connectivity. Otherwise, the thrust toward digitisation may affect businesses and livelihoods of people,” he said.

Amit Trivedi, financial market trainer, author, says that Jaitley’s announcement was a nudge to people to adopt cashless transactions. “The force was applied by the demonetisation announcement on 8 November and Jaitley gave a nudge on 8 December.” He sees demonetisation and Digital India as two sides of the same coin with the goal being to get the country to go cashless in a major way. Though the plan is huge, implementation will throw up hurdles, he says, given the size of the country and the education levels of the people.

Let’s take a look at each of the 10 ‘discounts’ offered by Jaitley:

Union Finance Minister Arun Jaitley. PTI file photoUnion Finance Minister Arun Jaitley. PTI file photo

Union Finance Minister Arun Jaitley. PTI file photo

Announces 0.75 percent discount for people buying petrol, diesel via digital payment platforms. A total of 4.5 crore consumers buy petrol and diesel worth Rs 1,800 crore daily. In one month, digital payments have doubled to 40 percent. The government expects fuel transactions worth Rs 2 lakh crore to be carried out via digital mode.

What the government is doing is forcing people to go digital and use any type of card, be it debit or credit card to get to digital mode of payments. This will have only a limited effect, say analysts. It must be remembered that any usage of cards on the digital mode has a cost factor unlike offline payment methods. Why would anyone pay more, even if it is only the case of 75 paise discount as the government has announced with regard to buying petrol and diesel via digital payment platform?

Effective 1 January 2017, 0.5 percent discount would be available for people buying monthly seasonal tickets in the suburban railway networks through digital payment mode, starting from the Mumbai suburban railways.

This discount will only help users who are familiar and comfortable making digital payments. Though this move of the government too can be suspected to give a certain push to the number of people opting for online mode of payments, the large majority will hesitate to get on to the digital bandwagon. People are still wary of using the medium and there is a trust deficit. This is because many people are aware that credit and debit cards password numbers can be photographed, copied or the details siphoned off . Case in point, Kerala ATM fraud a few months ago. Unless security challenges are not addressed, people will be hesitant to use digital modes of payment. Cyber laws are very weak in India and people will have to make repeated visits to call centres, banks in case of a fraud. Even after making repeated rounds to banks and call centres, there is no certainty the user will get his money back. However, this announcement will give a push to digital users who will go all out and use it with the added incentive of a discount.

“Monetary incentives alone may not be enough,” says Trivedi. He wants the government to clarify on online charges for payments of utility bills. ” If I want to pay my electricity bill online, there is a charge to be paid online. These payments and bookings will have to be streamlined,” he says.

Insurance cover worth Rs 10 lakh for travellers who book railway tickets through digital mode

Insurance was always available with the Railways and those who opted for online booking were aware of it. However, insurance was optional and customers would not avail it. Now this facility is extended to digital payment methods. However, its benefit is questionable as it is a ‘forced’ manner of getting people to adopt a new technology.

A discount of 5 percent for transactions on digital payment mode for railway facilities like catering, retiring rooms
With this discount, what the Railways are doing is asking customers to pay for using Railway facilities using digital modes. A five percent discount is not much of a margin and not many would opt for it.

Buying general, life insurance policies from the websites of public sector insurance firms and using the same for paying premium would attract discounts of 10 percent and 8 percent respectively.
This is a curious offer. Why is the FM only focusing on public sector insurance firms? This is hardly a discount at 8 and 10 percent. With this offer what the government is doing is ensuring business for public sector insurance companies. This is a biased decision. Discrimination between public and private insurance firms in this manner is unwarranted. Just for the sake of the discounts being offered, no one will opt for a public sector insurance firm. Besides, there are other aspects that come into play when one buys a insurance.

NABARD will give RuPay card to people who possess Kisan Credit Card.

RuPay card has gained a market share in comparison with Visa and Mastercard because it is offered by banks. However, extending it to kisan credit card may not lead to any significant strides in business. Will the kisan, for whom it is intended, use it? Though the government has opened Jan Dhan accounts for the bankless, it has largely remained zero balance accounts. For RuPay card to make a difference to the farmer, he has to know bank transactions. Banking services need to penetrate remote villages and far flung areas in the country. Has the credit card gained popularity with the farmer as of now? It is debatable.

Seeking to expedite the digital switchover, the government has decided to provide two point-of-sales machines each to villages with and over 10,000 population. A total of one lakh villages will be selected for the purpose across the country.

Currently, the number of Point of Sale (POS) machines are too low. For a population of 10,000, this can work provided villagers have a bank account and also an income to be able to swipe money off machines. If there is not much income then the use of POS machines will be limited.The other major hurdle for government is infrastructure — Internet connectivity in urban areas are not up to the mark. So what is the government talking about?

A 10 percent discount on digital payments for RFID or fastags for highway toll has also been made.

This is one of the good things in the announcement made by Jaitley. A 10 percent discount is good enough for digital payments for RFID, said Jitendra Solanki of JS Financial Advisors. But there is a catch here too. With security remaining a cause for concerns, how many will whip out their debit or credit cards or use mobile wallets for highway toll is to be seen.

In order to ensure government departments and public sector enterprises go on a cashless path, the Merchant Discount Rate will not be borne by customers for public dealings.

This is a also a good move by the government as it concerns payment to government departments. Going cashless will provide benefits to citizens.

Public sector banks are advised that merchants should not be required to pay more than Rs 100 per month as monthly rental for PoS terminals/Micro ATMs/mobile POS from the merchants to bring small merchant on board the digital payment ecosystem.

This is a good move, too. To use a POS machine, a merchant has to pay around Rs 250 or Rs 300 to the bank. This was a big hurdle for small shopkeepers. To pay just Rs 100 per month is an affordable fee and many shopkeepers will now be encouraged to use it and increase their business.

First Published On : Dec 9, 2016 13:32 IST

AAP accuses Modi government of partnering blacklisted currency paper supplier

New Delhi: The Aam Aadmi Party (AAP) on Thursday accused the Narendra Modi government of compromising national security by partnering with a currency paper supplier who was earlier blacklisted for working with a fake currency nexus. Union Finance Minister Arun Jaitley denied the allegations.

The AAP alleged that De La Rue, a Britain-based banknote manufacturer, security printing, and papermaking company was blacklisted in India.

The new Rs 2,000 note

The new Rs 2,000 note

AAP Delhi convener Dilip Pandey said that De La Rue supplied the same paper used for printing Indian currency to the terror nexus in Pakistan indulging in the printing of fake currency.

“The company was not only white-listed after Modi came to power, but also partnering with the government on Modi’s ambitious ‘Make in India’ project,” he said.

Pandey alleged that the new Rs 2,000 note is also being printed on paper supplied by De La Rue.

“We want to ask Prime Minster Modi that why is he partnering with a company which is at the same time partnering with Pakistan, terror outfits, counterfeit currency printers and enemy of the nation,” he asked

Responding to the allegations, Jaitley said that the Finance Ministry had no links with the said company.

“Another false campaign on the social media by the AAP. Ministry of Finance has no dealings with the British Company named in this campaign,” Jaitley tweeted.

Pandey, however, tweeted back saying that De La Rue was still working with Mysore press printing currency notes.

First Published On : Dec 9, 2016 13:09 IST

Demonetisation: Who knew? Modi’s black money move kept a closely guarded secret

Prime Minister Narendra Modi handpicked a trusted bureaucrat, little known outside India’s financial circles, to spearhead a radical move to abolish 86 percent of the country’s cash overnight and take aim at the huge shadow economy.

Hasmukh Adhia, the bureaucrat, and five others privy to the plan were sworn to utmost secrecy, say sources with knowledge of the matter. They were supported by a young team of researchers working in two rooms at Modi’s New Delhi residence, as he plotted his boldest reform since coming to power in 2014.

When announced, the abolition of high-value banknotes of 500 and 1,000 rupees came as a bolt from the blue.

Hasmukh Adhia, Revenue secretary. Image courtesy PIBHasmukh Adhia, Revenue secretary. Image courtesy PIB

Hasmukh Adhia, Revenue secretary. Image courtesy PIB

The secrecy was aimed at outflanking those who might profit from prior knowledge, by pouring cash into gold, property and other assets and hide illicit wealth.

Previously unreported details of Modi’s handling of the so-called ‘demonetisation’ opens a window onto the hands-on role he played in implementing a key policy, and how he was willing to act quickly even when the risks were high.

While some advocates say the scrapping of the banknotes will bring more money into the banking system and raise tax revenues, millions of Indians are furious at having to queue for hours outside banks to exchange or deposit their old money.

Labourers have also been unpaid and produce has rotted in markets as cash stopped changing hands. Not enough replacement notes were printed in preparation for the upheaval, and it could take months for things to return to normal.

With India’s most populous state, Uttar Pradesh, holding an election in early 2017 that could decide Modi’s chances of a second term in office, there is little time for the hoped-for benefits of his cash swap to outweigh short-term pain.

Modi has staked his reputation and popularity on the move.

“I have done all the research and, if it fails, then I am to blame,” Modi told a cabinet meeting on 8 November shortly before the move was announced, according to three ministers who attended.

Direct line to Modi

Overseeing the campaign, with support from the backroom team camped out at Modi’s sprawling bungalow in the capital, was Adhia, a top finance ministry official.

The 58-year-old served as principal secretary to Modi from 2003-06 when he was chief minister of Gujarat state, establishing a relationship of trust with his boss and introducing him to yoga.

Colleagues said he had a reputation for integrity and discretion.

Adhia was named revenue secretary in September 2015, reporting formally to Finance Minister Arun Jaitley. In reality, he had a direct line to Modi and they would speak in their native Gujarati when they met to discuss issues in depth.

In the world’s largest democracy, the demonetisation was revolutionary: it called into question the state’s promise to ‘pay the bearer’ the face value on every banknote.

At a stroke, Modi scrapped money worth 15.4 trillion rupees ($220 billion), equal to 86 percent of cash in Asia’s third-largest economy.

The idea is backed by some economists, although the speed of its implementation is widely seen as radical.

“One is never ready for this kind of disruption – but it is a constructive disruption,” said Narendra Jadhav, a 31-year veteran and former chief economist of India’s central bank who now represents Modi’s party in the upper house of parliament.

Modi, in his TV address to the nation, cautioned that people could face temporary hardship as replacement 500 and 2,000 rupee notes were introduced. Calling for an act of collective sacrifice, he promised steps to soften the blow for the nine in 10 Indians who live in the cash economy.

Biggest, boldest step

Immediately after the address, Adhia sent a tweet: “This is the biggest and the boldest step by the Government for containing black money.”

The boast harked back to Modi’s election vow to recover black money from abroad that had resonated with voters fed up with the corruption scandals that plagued the last Congress government. Yet, in office, he struggled to keep his promise.

Over more than a year, Modi commissioned research from officials at the Finance Ministry, the central bank and think-tanks on how to advance his fight against black money, a close aide said.

He demanded answers to questions such as: How quickly India could print new banknotes; how to distribute them; would state banks benefit if they received a rush of new deposits; and who would gain from demonetisation?

The topics were broken up to prevent anyone from joining the dots and concluding that a cash swap was in the offing.

“We didn’t want to let the cat out of the bag,” said a senior official directly involved. “Had people got a whiff of the decision, the whole exercise would have been meaningless.”

Under Adhia’s oversight, the team of researchers assembled and modeled the findings in what was, for it, a theoretical exercise.

It was made up of young experts in data and financial analysis; some ran Modi’s social media accounts and a smartphone app that he used to solicit public feedback.

Yet, for all the planning, Modi and Adhia knew they could not foresee every eventuality, and were willing to move swiftly.

The announcement caused chaos, with huge queues forming at banks when they reopened after a short holiday.

New 2,000 rupee notes were hard to come by and barely any new 500 rupee notes had been printed. India’s 200,000 cash dispensers could not handle the new, smaller, notes and it would take weeks to reconfigure them.

Filling ATMs with the 8 trillion rupees ($117 billion) in new banknotes that the Finance Ministry reckons are needed to restore liquidity to the economy is even trickier.

In a best-case scenario, in which India’s four banknote presses churned out new 500 and 2,000 rupee notes designed to replace the abolished ones, it would take at least three months to hit that target.

Secrecy paramount

Secrecy was paramount, but clues had been left.

Back in April, analysts at State Bank of India said that demonetisation of large-denomination notes was possible.

The Reserve Bank of India, the central bank, also disclosed in May that it was making preparations for a new series of banknotes that were confirmed in August when it announced it had approved a design for a new 2,000 rupee note.

The printing presses had only just started turning when the media finally started to run with the story in late October.

“The plan was to introduce it around 18 November, but there was a clear sign that it could get leaked,” said one person with direct knowledge who asked not to be named due to the sensitivity of the matter.

Some officials in the Finance Ministry had expressed doubts about scrapping high-value notes when the idea came up for discussion. They now feel resentment at the secrecy in which Adhia rammed through the plan on Modi’s orders.

They also say the plan was flawed because of a failure to ramp up printing of new notes ahead of time.

Other critics say the Adhia team fell prey to a form of ‘group think’ that ignored outside advice.

In the words of one former top official who has worked at the Finance Ministry and central bank: “They don’t know what’s happening in the real world.”

First Published On : Dec 9, 2016 09:21 IST

Discount shower on digital highway

<!– /11440465/Dna_Article_Middle_300x250_BTF –>In all the liquidity crunch unleashed by demonetization, if you are feeling a bit technologically challenged, the government has now given you reasons to make that crucial switch in payment mode. After sucking out over 85 per cent of cash by making old Rs 500 and Rs 1,000 notes illegal tenders since November 8, the government on Thursday announced a slew of incentives to boost the use of digital or electronic mode of payments. These sops are mostly in the form of discounts. For example, digital payment for petrol and diesel at government-owned gas stations can get you a 75 basis points (bps) off on the retail price.So, at the current price of Rs 66.10 per litre in Delhi, you can save around 50 paise per litre. Finance minister Arun Jaitley has worked out the math well. According to him, the percentage of digital transactions at state-owned petrol pumps has doubled from 20 per cent to 40 per cent in a month. He said around 4.5 crore customers bought fuel worth Rs 1,800 crore at these pumps every day in the last month. This means transaction worth Rs 360 crore has moved from cash to digital.Jaitley expects his discount offer to drive at least 30 per cent more customers to digital modes of payment, which will further slash cash usage at petrol pumps by Rs 2 lakh crore annually. The government has offered other concessions like a 50 bps off on monthly or seasonal tickets on suburban railway network beginning January 1 next year, and a 5 per cent discount on catering, accommodation, retiring rooms and other paid services of railways. In another major move, it has waived off service tax on the use of credit card, debit card, charge card or any other payment card for paying Rs 2,000 in a single transaction.Online train ticket booking will fetch a passenger free accidental insurance cover of up to Rs 10 lakh and use of RFID or fast-tags will lower toll fee paid at toll plazas on the National Highway by 10 per cent.Other measures include offering free point of sale (PoS) machines to 1 lakh villages with a population of up to 10,000, abolishing Merchant Discount Rate (MDR) on digital transactions for central government and PSU services, rental cap of Rs 100 for PoS terminals, micro ATMs and Mobil PoS, Rupay Kisan cards for Kisan cardholders and discount and credit by PSU insurance companies of up to 10 per cent of the premium for general insurance policies and 8 per cent for new life cover from Life Insurance Corporation (LIC).Meanwhile, the National Bank for Agriculture and Rural Development (NABARD) declared that it will extend support to banks for deployment of two PoS devices per village in 1 lakh villages. The estimated cost of support will be around Rs 120 crore.For those farmers who are already on RuPay Kisan Credit Card (KCC) platform, NABARD will now support procurement of Europay, Mastercard and Visa chips and PIN-based RuPay Kisan cards by regional rural and rural cooperative banks. NABARD will spend approximately Rs 108 crore to cover around 4.32 crore KCC holders.“We believe that these two initiatives will have a positive impact in easing the transition to digital transactions,” said NABARD chairman Harsh Kumar Bhanwala.Naveen Surya, chairman, Payment Council of India, said the cost reduction that would accrue from the shift to digital modes of payment should be passed on to the end-consumers. “Benefits passed on to consumers will give a booster growth to digital payment companies,” he said.He called for more such incentives for other services like electricity or mobile bills, long-distance railway tickets and others. Jaitley said that the government was eventually aiming at making political donations payments also digital, like in many developed countries.“This (incentives and demonetization) will certainly move India to less cash economy,” he said.

Demonetisation day 30: Govt’s digital push is good, but it also shows a changing narrative

At this stage, there appear to be no immediate tangible monetary gains of demonetisation in sight, hence the change in the primary narrative and target of Narendra Modi government’s major currency crackdown to cashless economy isn’t difficult to understand.

This is even more evident from Finance Minister Arun Jaitley’s presser on Thursday detailing government’s big package to push cashless transactions in the society. The announcement, mainly reduction in transaction charges on digital payments and tax rebates on smaller transactions makes it clear that the government intends to pursue the theme of cashless economy with more vigour in the days ahead.

Prime Minister Narendra Modi. AFPPrime Minister Narendra Modi. AFP

Prime Minister Narendra Modi. AFP

Announcing the measures, Jaitley said the government will offer reduction of 0.75 percent on digital transactions for fuel purchase, similar discounts on suburban railways tickets, insurance policy payments, toll payments on national highways besides offering Rs10 lakh free insurance cover for travellers who book railway tickets through digital mode. The minister also announced the offering of free Rupay credit cards to farmers and two PoS terminals each to one lakh villages with population over 10,000. These measures are indeed positive to encourage more people do digital transactions and lessen the use of cash.

This new focus also reflects in prime minister’s recent speeches too. Marking the 30-day of demonetisation, the PM said, “We also have a historic opportunity to embrace increased cashless payments and integrate latest technology in economic transactions.” This is something which he said in the last Mann Ki Baat programme too. Modi saluted people “for wholeheartedly participating in this ongoing Yagna against corruption, terrorism, and black money”, and said, “government’s decision has several gains for farmers, traders, labourers, who are the economic backbone of our nation.” The shift in focus as 30 days of demonetisation gets over would likely raise further questions from the opposition. Modi’s critics would perhaps want to know the status of the originally stated objectives of fighting black money, corruption and terror funding. This is particularly so when seen against the hardships majority of India’s poor have been pushed into due to this massive exercise in the economy.

But, there are reasons to believe that the shift in the government narrative to cashless economy is also due to the indications that the gains on black money wouldn’t be major. Let’s set aside political claims and counter claims and look at this one month impartially. What are the salient features of one month of demonetisation?

On the negative side, there have been repeated flip-flops on rules, stories of cash crunch from across the country, the huge hit on rural economy and massive disruption of the informal sector that employs a majority of poor Indians giving them their livelihoods. On the positive side, we have seen a notable jump in non-cash transactions and the move has impacted the counterfeit note networks for now. After a month of demonetisation, the available data point out to the possibility that immediate gains from the drive are unlikely to be anything significant than one had hoped for. This is unless the government comes out with a big number on the amount of unaccounted cash uncovered and taxed to benefit the exchequer.

A cost-benefit analysis of demonetisation will have to be done once the government is done with the process and that’ll happen sooner than later. Unless there is a clear monetary gain at the end of the demonetisation exercise, the government will find it difficult to explain the timing and massively disruptive nature of the whole exercise, given the hit on the economy, which is difficult to estimate at this stage.

Speculations that the government will benefit from a “windfall” gain from RBI when a significant chunk of currency notes do not find their way back to the system, has ended after RBI governor Urjit Patel clarified that there is no plan to give any special dividend to the government.

Anyway, Patel’s clarification was irrelevant since almost Rs12 lakh crore money have come back to the banking system already (out of the Rs14 lakh crore demonetised).

Going by this pace, almost the entire money will come back to the banking system before the deadline to deposit old notes expires on 30 December. So what is the immediate monetary gain for the government now?

The only tangible benefit thus becomes the tax recovery from unaccounted cash deposits. If through the exercise, taxmen manage to get hoarders taxed for a substantial amount, the plan is a success, since that money is now taxed and up for productive use. The unaccounted cash could come back to the banking system either in the form of voluntary deposits or when the taxman knocks on the doors of tax evaders. In the first case, the tax and penalty will together be around 50 percent plus 25 percent of the deposits get locked for four years. If they get caught with the illegal cash, they will have to pay a penalty of 85 percent. Certainly, it isn’t an easy exercise for the taxman since the crooks know well how to keep their ill-gotten wealth safe, such as using benami accounts. Part of the reason why the government chose to offer an amnesty scheme to tax cheats is knowing this difficulty.

One should see government’s big push to cashless economy in this context. The government probably realises that at this stage putting the whole weight behind the cashless narrative is a safer bet rather than chasing the black money mirage, where a big success appears unlikely. Such a narrative will also have a revolutionary reform character. However, there are major challenges in aligning the consumer behaviour in favour of digital transactions in a country like India, where a majority of the poor still live in ash economy and initiatives such as two PoS terminals per village may not be effective enough. Even developed countries such as Singapore are still dependent on cash transactions to a significant extent is a proof that cash is something difficult to get rid of. Most experts agree that the change to cashless society should happen over a period of time, rather than being forced on the poor.

First Published On : Dec 8, 2016 20:01 IST

BJP goes on the offensive, Opposition waits for the kill

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Shifting gears on the orders of the high command, the treasury benches went on an offensive in the Upper House on Wednesday blaming opposition for not allowing debate on demonetization and in the process wasting more than Rs. 70 crores of government’s exchequers by obstructing 65 hours of Rajya Sabha alone.The tone of the offensive was set by leader of the house Arun Jaitley who blamed the opposition parties for tactically raising the issue of demonetization for two minutes during the zero hour for television coverage and then not allowing an elaborate discussion to take place in the house.“It seems the opposition just wants to disrupt proceedings for one reason or the other. If the opposition have guts I challenge them to start the discussion immediately,” said Jaitley.Jaitley intervened after leader of the opposition Ghulam Nabi Azad lashed out on the government for causing death of 84 people in different parts of the country because of ill planned demonetization.“My question is who is responsible for these deaths? When revenue secretary said that all our money will come back in the banking system then where is black money? And for what did you line up the whole India in queues? Why lakhs of people are getting unemployed? Why Reserve Bank of India has stopped giving figures of currency collection for the past 10 days?” said Azad attracting furore from the treasury benches.The house broke into pandemonium when Naresh Agarwal of Samajwadi Party said they (the opposition) would allow the house to function only once the “government apologises for putting the whole country in queue” and BSP leader Mayawati sought an apology from the PM for slapping “wrong allegation on the opposition”.Putting deputy chairman P J Kurien in a dilemma, members of the treasury benches got together and started shouting slogans, “Himmat Hai Toh Charcha Karo (If you have guts, start discussion)”. The house kept adjourning repeatedly thereafter as the opposition kept up its demand that it would allow the house to function and continue the unfinished discussion only when the Prime Minister comes and sits through the whole debate.Sources in the opposition parties, however, said they will not push the government beyond a point and would allow the discussion to take place next week.“Our members are well prepared and want to use the platform of parliament to send their viewpoint on demonetization across the public,” said senior MP from Congress.The opposition parties perceive that by next week they would hold an advantage as the pangs of cash crunch would have changed the situation on the ground and there won’t be much sympathy left for the government.

Parliament disrupted: Angry LK Advani reprimands Ananth Kumar, Sumitra Mahajan over stalemate

The impasse in Parliament over the issue of demonetisation has taken such a mammoth proportion that on Wednesday veteran BJP leader LK Advani was openly critical of Union Parliamentary Affairs Minister Ananth Kumar and Lok Sabha Speaker Sumitra Mahajan for failing to end the stalemate.

Led by Union Finance minister and Leader of the House Arun Jaitley in Rajya Sabha on Wednesday, the BJP took an aggressive stand and dared the Opposition to participate in the debate on demonetisation. The Parliament hardly did any business since the beginning of the Winter Session which already logged into its 16th day today.

BJP patriarch LK Advani. ReutersBJP patriarch LK Advani. Reuters

BJP patriarch LK Advani. Reuters

As soon as the House started, BJP members started shouting slogans from their benches after Jaitley challenged the opposition that to “have courage” to begin discussion on demonetisation, which they have been disrupting on a daily basis leading to many premature adjournments.

Disappointed by the series of adjournments, Advani spared none to express his anguish over the state of affairs. Apart from blaming Kumar and Mahajan, the veteran BJP leader also took the Opposition to task. Kumar’s efforts to mollify Advani did not have any desired impact on the veteran leader. Advani’s angered pitch was such that it was heard by the media persons sitting in the press gallery on the first floor of the House in Lok Sabha. The issue was such that it became an instant talking point among all concerned in the corridors of Parliament and outside.

At one level Advani’s giving a vent to his ire to his own party members, especially to someone who has been close to him and responsible for floor management in the both Houses of Parliament, could be taken as a genuine reading of the situation by the eldest statesman in the House. But then at another level, any such remark in full public on the current deadlock in Parliament on an issue as sensitive as demonetisation, could be taken as yet another censure of his own party and government.

Advani would know that his remarks would make instant news. Though senior BJP leaders including Information and Broadcasting and Urban Development Minister M Venkaiah Naidu played it down saying that this should be taken in good spirit, it could be easily assessed that ruling party had been deeply embarrassed by their ‘Margdarshak’.

The problem for the BJP is that the opposition might use Advani’s statement to target the government and go to town claiming that it was actually the government which was to be blamed for the deadlock in Parliament.

For over a year Advani had been silent, not speaking on any issue within and outside of Parliament. On demonetisation, he had issued a written statement hailing Modi’s decision. But his rather tough positioning on Parliament functioning came when a raging debate is going on the mismanagement of cash flow and hardships faced by common mass. At this juncture, the party could ill-afford reprimand on floor management from its senior most leader.

It had been over a year when Advani had taken on the current dispensation in the BJP. Shortly after BJP had lost Bihar elections Advani along with Murli Manohar Joshi and Yashwant Sinha had issued a joint statement, brief but tough and loaded: Results of Bihar elections has shown that “no lessons has been learned from the fiasco in Delhi. To say that everyone is responsible for the defeat is to ensure that no one is held responsible… Principal reason for latest defeat is the way the party has been emasculated in the last year. A thorough probe must be done of the reasons of defeat as well as the way party is being forced to kowtow to a handful and how its consensual character has been destroyed.”

This time around Advani’s message is not as direct and not as embarrassing but it has hit hard and made many talk about floor management and attitude of the government. The party stalwart may face further marginalisation but he apparently is not bothered for he would think that his was only true nature of a given situation.

There are some other people in the ruling party who feel that the issue could have been resolved if the government had shown slight flexibility. According to those believing in this line of thought, the prime minister should have been present in both Houses of Parliament when the Opposition had asked for initially and should have agreed to a discussion under a provision which requires voting.

“The party had taken a position that this was a fight against corruption and one has to be either for it or against it. Even if voting had been done, people would have taken note of who was with the government in the war against corruption, black money, fake currency and terror funding and those who were opposed to it,” said a government functionary.

First Published On : Dec 7, 2016 19:27 IST

Development alone can’t win polls, blending Hindutva must: Subramanian Swamy

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Senior BJP leader Subramanian Swamy on Tuesday said his party needed to blend development with Hindutva and a “promising fight against corruption” for electoral victory even as he deprecated the way demonetization exercise was being implemented.Swamy said he supported the idea of demonetization, but not the way in which it was being implemented. The senior Rajya Sabha member, a known critic of Finance Minister Arun Jaitley, criticised the Finance Ministry for lack of preparation before undertaking the exercise, saying an economist should helm it. “Economic development is a must, but you can win the polls (even) if the economy is flattened,” Swamy said speaking on ‘Desh Ka Mudda’ (The issue before the nation) on ‘Agenda Aaj Tak’.To back his claim, he said, former Prime Minister PV Narsimha Rao introduced economic reforms and took the economy from 3 per cent to 9 per cent, while Rajiv Gandhi’s tenure saw a phenomenal 14 per cent industrial growth. However, both lost the polls. “Our (BJP) spokespersons keep talking about development, but they should learn from (Atal Bihari) Vajpayee because even he talked about India Shining (BJP’s campaign slogan in 2004 Lok Sabha polls) and left other things. We lost badly and (the BJP tally) were reduced to half,” Swamy said, adding “in politics, economic development is a must, but that is not sufficient”.Advocating a three-pronged approach to win polls, Swamy said, economic development is a must, but it should be blended with “Hindutva and a promising fight against corruption.” “The politics that has been going on before 2014 was (about) how to divide the votes on caste, region, religion and language, by consolidating the minority and dividing the majority. “If one has to combat that, then majority vote has to be consolidated. Hindus are 80 per cent, but BJP got 31 per cent votes (in 2014). Consolidating Hindu vote is compulsory,” he said.Swamy said there was no need for the Lok Sabha to pass Taxation Laws (Second Amendment) Bill, 2016, which gives people with unaccounted cash another chance to come clean.Instead, he said, Income Tax should have been abolished. The BJP leader also agreed with MIM MP Asaduddin Owaisi, who was a participant in the panel discussion, that the informal sector will collapse because of demonetization and the country would have to face dire consequences because of that.

Congress,TMC in ‘competitive obstructionism’ in Parliament: Arun Jaitley

Mon, 5 Dec 2016-08:25pm , New Delhi , PTI
<!– /11440465/Dna_Article_Middle_300x250_BTF –>With Parliament getting stalled over demonetization for the 13th consecutive day, Finance Minister Arun Jaitley on Monday said that Congress and Trinamool Congress are indulging in “competitive obstructionism”.”It is now competitive obstructionism between the Congress and the Trinamool which is holding up the debate in Parliament,” Jaitley said in a Facebook post. The ongoing Winter session of Parliament has virtually been a washout with opposition Congress and Trinamool staging vociferous protest against demonetization of 500 and 1,000 rupee notes announced by Prime Minister Narendra Modi on November 8.Besides demonetization, Trinamool Congress has been targeting the government over presence of army at toll plazas in West Bengal. Congress and some other opposition parties have been demanding apology from Modi for his remarks against those criticising the demonetization move.

Afghan Prez gives Pak a $500mn-snub on terror

<!– /11440465/Dna_Article_Middle_300x250_BTF –>It doesn’t get more direct than what Afghanistan President Ashraf Ghani had to say in Amritsar on Sunday.”Pakistan,” he told representatives of nearly 50 countries or organisations attending the Heart of Asia conference, including Pakistan Foreign Affairs and Security Adviser Sartaj Aziz, “has pledged 500 million dollars for Afghanistan’s development. This amount, Mr Aziz, can be spent to fight terrorists and extremists in Pakistan.”TV cameras did not capture Aziz’s expression, but the sting in Ghani’s words was not lost on anyone.The Afghan President did not stop at that.”A key Taliban leader,” the Afghan President said, “has himself admitted to getting sanctuary in Pakistan. He said that without Pakistan support, we would had not lasted for more than a month.”As if on cue, Prime Minister Narendra Modi, who co-chaired the conference with Ghani, called for action “against those who support, shelter, train and finance” terrorists.”Silence and inaction against terrorism in Afghanistan and our region will only embolden terrorists and their masters,” he continued in the same vein.This double-barrelled attack on Pakistan, by the Afghan and Indian leaders, was in keeping with India’s attempts of late to shame their common neighbour and further isolate it diplomatically.The bonhomie between Kabul and New Delhi extended to the bilateral talks between Ghani and Modi on the margins of the conference.Economic partnership via trade and connectivity, development assistance and security cooperation were among the bilateral, regional and global issues that came up for discussion in their meeting.Foreign Ministry Spokesperson Vikas Swarup said that Ghani and Modi agreed to strengthen counter-terrorism cooperation to combat especially the cross-border nature of the scourge which had caused immense suffering to the people of India and Afghanistan.Both countries decided to operationalise the additional one billion meant as Indian development assistance for infrastructure and connectivity projects. They also plan to introduce an air transport corridor between India and Afghanistan to give India and Afghan consumers and producers unimpeded access to each other’s products and services.Modi was to amplify it later by saying that “Afghanistan should be at the centre of our connectivity networks, not peripheral to them. On our part, we see Afghanistan as the hub for strengthening links of connectivity between South Asia and Central Asia.””We,” he said, “cannot deny that the more connected Afghanistan is with the regional arteries of trade, capital and markets, the more assured would be its economic growth and progress. President Ghani and I have converged on the priority of strengthening trade and transport linkages with other partners in the region.”For his part, Ghani said that all the countries in Afghanistan’s neighbourhood and beyond “need to identify cross-border terrorism and a fund to combat terrorism”. He lauded India’s development role in his war-torn country by saying that Indian assistance is transparent and came without any strings attached. “There are no hidden agreements or secret conditions… it is convergence of interests and values of two states inspired by the belief in cooperative advantage.”Aziz defended by saying in his intervention afterwards at the conference that “it is simplistic to blame only one country for the recent upsurge in violence” in Afghanistan. In an oblique reference to the continued India-Pakistan tensions, he said that peaceful resolution of outstanding disputes will further improve regional cooperation and connectivity in the region. (Pakistan does not allow India access through its territory for exporting goods to Afghanistan.)However, at a joint news conference with Afghanistan Deputy Foreign Minister Hekmat Karzai, Finance Minister Arun Jaitley (standing in for Foreign Minister Sushma Swaraj, who is indisposed) said that terrorism was at the very core of the deliberations and that the tone had been set by Ghani and Modi earlier in the day.Karzai, in turn, spoke about how Pakistan, without naming it, is nurturing and flirting with terrorism, which has consequences not only for Pakistan itself but also for the region.The participating countries, Jaitley added, recognised that terrorism was the biggest threat to peace and stability and the Amritsar Declaration adopted towards the end of the summit expressed concern over violence perpetrated by terrorist groups such as Lashkar-e-Taiba and Jaish-e-Mohammad.If there were fears that India-Pakistan tensions would hijack the conference agenda, it was not to be. In the end, Aziz’s engagements did not go beyond the customary handshake and photo-op with Modi. Foreign Ministry Spokesperson Vikas Swarup maintained that there was no pull-aside or bilateral meeting between Aziz and National Security Adviser Ajit Doval either.

Heart of Asia Summit: Terrorism takes centre stage, Modi calls for ‘resolute’ action

Cross-border terrorism once again took centre stage at an international platform as the 6th Annual Heart of Asia Summit adopted the Amritsar Declaration that reiterated the need to stem terrorism in the region on Sunday.

Afghanistan President Ashraf Ghani and Prime Minister Narendra Modi discussed aspects of strengthening counter-terror cooperation at the Heart of Asia-Istanbul Process conference, which saw participation of over eight foreign ministers and dignitaries of 14 other countries from south and central Asia and several western countries.

In a clear message to Pakistan, Modi called for “resolute action” not just against forces of terrorism but also against those who support, shelter, train and finance them, saying silence and inaction will only embolden terrorists and their masters.

In his inaugural address at the 6th conference of Heart of Asia, a platform to help Afghanistan in its transition, Modi said the growing arc of terrorist violence is posing the gravest threat to the region.

“Terrorism and externally induced instability pose the gravest threat to Afghanistan’s peace, stability and prosperity. And, the growing arc of terrorist violence endangers our entire region. As such, support for voices of peace in Afghanistan alone is not enough,” he said.

Amritsar: Prime Minister Narendra Modi and President of Afghanistan Ashraf Ghani shake hands at 6th Heart of Asia Conference in Amritsar on Sunday. PTI Photo  (PTI12_4_2016_000077B)

Prime Minister Narendra Modi and President of Afghanistan Ashraf Ghani shake hands at 6th Heart of Asia Conference in Amritsar on Sunday. PTI

“It must be backed by resolute action. Not just against forces of terrorism, but also against those who support, shelter, train and finance them,” the prime minister said.

“Silence and inaction against terrorism in Afghanistan and our region will only embolden terrorists and their masters. Third, our bilateral and regional commitments of material assistance for Afghanistan’s development and humanitarian needs must continue and increase,” Modi added.

The prime minister said there was a need to demonstrate strong and collective will to defeat terror networks that cause bloodshed and spread fear.

Even though Modi refrained from naming Pakistan at the summit, which also saw the attendance of Pakistan’s de facto foreign policy chief Sartaj Aziz, the Afghan Premier went all out and openly named Pakistan as a terror ‘sanctuary’.

Ghani, in his Sunday’s speech at the summit, unambiguously named Pakistan for promoting terrorism and said no amount of financial assistance can help stabilise the war-ravaged nation if “support to terrorists” from the neighbouring country continued.

He said that military operations in Pakistan have brought about selective displacement of terrorists.

“The state-sponsored sanctuaries exist in Pakistan. A Taliban figure said recently if they had no sanctuary in Pakistan, they wouldn’t last for more than a month,” Ghani said at the two-day event being hosted by India in Amritsar.

Even though the Afghan President thanked Pakistan for its pledge to donate $500 million for reconstruction of the war-ravaged nation, he did not shy away from lashing out at the terrorism emanating from the Pakistani soil.

Directly addressing Pakistan’s top diplomat, Ghani said, “I hope that you (Sartaj Aziz) use it to fight terrorists and extremists in Pakistan.”

Ghani shared India’s concern on cross-border terrorism and said the world needed to fight the “menace”.

“Afghanistan suffered the highest number of casualties last year. This is unacceptable. Some (countries) still provide sanctuary for terrorists,” he said

The Afghan president said he didn’t want to engage in a blame game at this event but wanted clarification on what is being done to “prevent the export of terror”.

Meanwhile, the Pakistani diplomat also hit back reiterating that his country “is committed to lasting peace in Afghanistan and the region”.

Aziz on Sunday said that it was wrong to hold only one country responsible for the violence in the region.

“We are cognisant that Afghanistan continues to face serious challenges… This needs to be addressed,” a CNN-News18 report said.

“It’s simplistic to blame only one country for the recent upsurge in violence. We need to have an objective and holistic view,” he said.

Aziz said Pakistan had “been making serious efforts for facilitating peace talks between the Afghan government and Taliban that have not yet produced positive results”.

“We need to make an objective evaluation of our efforts for peace and stability in Afghanistan,” he added.

Aziz said his government stood in solidarity with the elected government and people of Afghanistan in furthering the objective of peace, stability and development.

Sartaj Aziz Pakistani Prime Minister&#x92;s Advisor on Foreign Affairs at the Heart of Asia Summit in Amritsar. PTI

Sartaj Aziz Pakistani Prime Minister’s Advisor on Foreign Affairs at the Heart of Asia Summit in Amritsar. PTI

Meanwhile, Finance Minister Arun Jaitley, who was representing an ailing External Affairs Minister Sushma Swaraj also pressed for the need of eliminating terrorism in the region while stating that “neighbours of Afghanistan” have a particular responsibility in this regard. Jaitley also announced the adoption of an anti-terror declaration at the annual summit, highlighting that it is the biggest impediment to putting Afghanistan back on the trajectory of development and growth.

The theme for the Heart of Asia Summit this year is ‘Addressing Challenges, Achieving Prosperity’. As Afghanistan faces the challenges related to its multiple transitions, focused and sustained support will be required from all friends of Afghanistan in the international community for overcoming these challenges and achieving durable peace and prosperity, Jaitley said.

The declaration, while reaffirmed the attendee nation’s commitment for a peaceful and stable Afghanistan, recognised that “terrorism is the biggest threat to peace, stability and cooperation in our region.”

The Amritsar Declaration said: “We strongly call for concerted regional and international cooperation to ensure elimination of terrorism, in all its forms and manifestations, including dismantling of terrorist sanctuaries and safe havens in the Heart of Asia region, as well as disrupting all financial, tactical and logistical support for terrorism.”

The declaration, although subtly, also acknowledged that terrorism finds roots in the region only because there is a support mechanism available locally. “Acknowledging the support that terrorism derives in our region, we demand an immediate end to all forms of terrorism, as well as all support to it, including financing of terrorism,” the declaration further added while highlighting the pandemic of terrorism.

The Amritsar Declaration also urged the member states to continue to work towards the goal stating: “We strongly call for concerted regional and international cooperation to ensure elimination of terrorism, in all its forms and manifestations, including dismantling of terrorist sanctuaries and safe havens in the Heart of Asia region, as well as disrupting all financial, tactical and logistical support for terrorism.”

With inputs from agencies

First Published On : Dec 4, 2016 19:31 IST

Amarinder Singh slams Arun Jaitley after I-T department files complaint against him

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Former Punjab chief minister Amarinder Singh on Friday lashed out at Union Finance Minister Arun Jaitley, after the Income Tax Department filed a prosecution complaint against him in a foreign tax evasion case.”I challenged @arunjaitley to fight by-elections in Amritsar and this is how he responds. So predictable!”, Singh tweeted.Earlier in June, the Enforcement Directorate issued summons to Amarinder’s son Raninder Singh for allegedly violating the Foreign Exchange Management Act (FEMA).Dubbing the summons as “fraud notice”, Amarinder had alleged that Jaitley was behind it. “This is total fraud notice. This issue of income tax and all has been done by Jaitley, he can’t get over his defeat,” Amarinder said.Amarinder, who will lead the Punjab Congress in the upcoming assembly elections eyeing the Chief Minister seat, recently resigned from his Lok Sabha membership in protest against the Supreme Court order on the Sutlej Yamuna Link canal issue.

I-T files chargesheet against Amarinder Singh in foreign assets case

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Income Tax department has filed a chargesheet against Punjab Congress chief Amarinder Singh in connection with its probe against him and his son in a case of alleged untaxed foreign assets.Official sources said the department filed the prosecution complaint (equivalent to a police charge sheet) in a competent court in Ludhiana in Punjab on Thursday and the former chief minister has been charged under section 277 of the I-T Act (false statement in verification) and IPC sections 176 (omission to give notice or information to public servant by person legally bound to give it), 177 (furnishing false information), 193 (punishment for false evidence) and 199 (false statement made in declaration which is by law receivable as evidence).Amarinder took to Twitter to accuse Finance Minister Arun Jaitley of complicity. “I challenged Arun Jaitley to fight by-elections in Amritsar and this is how he responds. So predictable!,” he tweeted.According to the complaint, a copy of which was accessed by PTI, the I-T department said during its investigations Singh was “found to be the beneficiary” of a trust and other properties owned and created by his son Raninder in a foreign territory and when questioned about these, the Congress chief ministerial candidate for the state gave a “false statement on oath” about the ownership of these assets. It said Singh was “actively involved” in the creation of these trusts and foreign properties which were not disclosed to the department for tax purposes.The department has already filed a similar complaint against Raninder and has charged him under section 276C of the I-T Act in the case (wilful attempt to evade tax) and the same charges would now apply on the senior Singh. The case came to light when the Income Tax department received information about Raninder allegedly holding the offshore account in Switzerland as part of details received by the Central Board of Direct Taxes from its French counterparts in 2011.The department had also detected movement of funds to Switzerland and creation of a trust and a few subsidiaries in the tax haven of British Virgin Islands allegedly by Raninder. Both Amarinder and Raninder have denied any wrongdoing and termed as “false” the charges.Based on the earlier I-T department charge sheet, the Enforcement Directorate too had registered a case against Raninder under the provisions of the Foreign Exchange Management Act (FEMA) sometime back and has also questioned him.Jaitley had lost the Amritsar Lok Sabha seat in 2014 to Amarinder Singh. Only on Thursday Amarinder had dared Jaitley to contest the Amritsar bypoll again, saying let it be a referendum on the Narendra Modi government’s demonetization move.

Demonetisation Day 24: ‘Make in India’ innovator caught with fake notes; queues get longer at pumps

The All India Bank Employees’ Association (AIBEA) and All India Bank Officers’ Association (AIBOA) have urged Union Finance Minister Arun Jaitley to advise the Reserve Bank of India (RBI) to publicly announce the details of currency notes supplied to various banks.

In a joint letter to Jaitley, the two major unions pointed out that RBI’s repeated public statements that adequate cash is being supplied to banks, contrary to the reality, makes it seem to the public as if the RBI is supplying cash to banks and bank staff are deliberately not extending payments. The news updates from day 24 show their concerns to be quite valid.

Punjab innovator arrested with fake notes

A young engineer, whose innovation got appreciation from Prime Minister Narendra Modi last year, landed in the police net after he and his accomplices were caught with fake Rs 2,000 notes in Mohali town of Punjab.

Abhinav Verma had claimed to have created ‘Live Braille’, a wearable technology innovation that helped blind people to walk around without the aid of a walking stick last year. The device used sensors to guide blind people and was hailed as a success. It even got a mention from Modi in December last year at the Indian Science Congress in Bengaluru. The device was commercially launched this year, touted as an innovation under the ‘Make in India’ programme, and sold in India and over 15 countries.

The Punjab Police in Mohali, adjoining Chandigarh, recovered fake currency worth Rs 42 lakh in Rs 2,000 denomination and arrested Abhinav Verma, his cousin Vishakha Verma, and Ludhiana-based property dealer Suman Nagpal. The trio, along with two others, were duping people by exchanging the demonetised Rs 500 and 1,000 notes for the fake Rs 2,000 notes. They were charging 30 percent commission for the exchange.

Heavy rush in banks, treasuries continues in Kerala

Banks and treasuries in Kerala are witnessing heavy rush and serpentine queues on Friday for the second consecutive day, with people queueing up to withdraw salaries and pensions.

The state government had asked RBI to release Rs 127 crore to meet the demand for distributing salaries and pensions, but received only Rs 57 crore till 11 am, official sources in Kerala said. As many as 50 treasuries are yet to receive any amount and the treasury employees are waiting at the banks to get the money released, they said.

Protesting the fund crunch in treasuries and difficulties faced by people, around 50 government employees, under the aegis of NGO association, took out a march to the district treasury in Thiruvananthapuram.

Representational image. Reuters

Representational image. Reuters

Cash seizure in new currency rises to Rs 5.7 crore

The biggest-ever seizure of cash in new currency on Friday grew to over Rs 5 crore even as the Income Tax department said it detected unaccounted income worth Rs 152 crore after it conducted searches in a dozen premises in Bengaluru and other locations.

I-T officials said the cash found after searches were launched, on Thursday, on the premises of two engineers, working with the state government, and two contractors have risen to Rs 5.7 crore and these notes are in the denomination of the newly introduced currency of Rs 2,000.

A team of over 50 I-T sleuths and police personnel had launched operations on Thursday and searched premises in Bengaluru, Chennai and Erode (Tamil Nadu). What had surprised the tax authorities is the sheer amount of new currency stashed by these individuals at a time when new notes are not available to the common public which is queuing up to withdraw even small amounts from their accounts.”Some entry operators and bankers are under the scanner. Such volume of new currency cannot be obtained without the connivance of bank officials,” a senior I-T department official said.

Queues get longer at pumps

As the new deadline allowing petrol pumps to accept scrapped high-denomination notes ends on Friday, long queues were witnessed at several fuel stations across the metropolis of Mumbai.

Besides the queues at petrol pumps, people lined up outside the banks and ATMs with many waiting to deposit old notes and withdraw money in Mumbai, as those who could not withdraw salary from banks on the first day post-demonetisation, queued up on Friday, struggling to withdraw cash to meet their monthly commitments. Many queues were especially for the senior citizens and pensioners. Also, non-functional and dried up ATMs worsened the situation prompting people to take to e-payments.

School children teach locals to make payments via mobile apps

Taking inspiration from the Prime Minister Narendra Modi‘s appeal for making “Cashless India” in his Mann Ki Baat programme, school children in Khargone have started encouraging locals to use mobile transaction app for utility and other necessary payments.

The children are not only making people aware of mobile transaction apps but also teaching them how to use it for paying power, telephone and municipal taxes among other things. KK Convent School has also set up a helpline desk to raise awareness among the parents to go for cashless transactions or make payments through cheques.

With inputs from agencies

First Published On : Dec 2, 2016 18:01 IST

Pakistan should introspect on why relations with India are tense, says Arun Jaitley

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Blaming Pakistan for having an uneasy relationship with India, Finance Minister Arun Jaitley on Friday said it is for Islamabad to introspect as to why there are tensions between the two neighbours.”It is a serious situation. Right from the day this government had been formed and even prior to that, India has taken one step after another honestly trying to improve relations with Pakistan,” he said at HT Leadership Summit here.”Prime Minister Narendra Modi took a lot of initiatives including unconventional ones but then the response was Pathankot or Uri attack, prompted by Pakistan. This cannot be normal as far as Indo-Pak relationships are concerned. If there are tensions, its for the Pakistan to introspect really why there are tensions,” he said.Asked about impact of change in regime in the US, Jaitley said the relationship between the two country is expected to strengthen further. “I have not the least doubt that India’s relations with the United States would continue to be on the same plank as it was, probably growing and maturing almost by the day,” he said. Further adding “This was unusual election as far as the US was concerned.When one world’s most powerful democracies through a fair electoral process takes a decision, we have to accept the decision.”

Pakistan should introspect why relations are tense, says Arun Jaitley

New Delhi: Blaming Pakistan for having an uneasy relationship with India, Finance Minister Arun Jaitley on Friday said it is for Islamabad to introspect as to why there are tensions between the two neighbours.

“It is a serious situation. Right from the day this government had been formed and even prior to that, India has taken one step after another honestly trying to improve relations with Pakistan,” he said at HT Leadership Summit in New Delhi.

Prime Minister Narendra Modi took a lot of initiatives, including unconventional ones but then the response was Pathankot or Uri attack, prompted by Pakistan, he said.

“This cannot be normal as far as Indo-Pak relationships are concerned. If there are tensions, it’s for the Pakistan to introspect really why there are tensions,” he said.

Asked about the impact of the change in regime in the US, Jaitley said the relationship between the two countries is expected to strengthen further.

“I have not the least doubt that India’s relations with the United States would continue to be on the same plank as it was, probably growing and maturing almost by the day,” he said.

“This was an unusual election as far as the US was concerned. When one of the world’s most powerful democracies through a fair electoral process takes a decision, we have to accept the decision,” he added.

First Published On : Dec 2, 2016 16:13 IST

Demonetisation hardships will last only one or two quarters, says Arun Jaitley

Bhubaneshwar: Finance Minister Arun Jaitley on Thursday said the hardships faced by people over demonetisation will remain for one or two quarters but its effect on the economy will be seen in long term.

Arun Jaitley. PTI file image

“The effect of demonetisation would remain for one or two quarters, but its effect on the economy would be seen in the long term,” Jaitley told reporters on the sidelines of the ‘Made in Odisha’ conclave.

He thanked Odisha chief minister Naveen Patnaik for backing the demonetisation and the Goods and Services Tax (GST).

Elaborating the effects of the two major decisions, he said, “I believe both decisions would prove a game changer. GST will ensure higher taxation as far as Centre is concerned and the states are concerned. It’s a more efficient system. It plugs leakages and it will certainly help a state like Odisha.”

As far as currency changes are concerned, once the process is completed and the economy gets back to full speed, the size of the GDP will expand, Jaitley said.

“Money coming to banks will be used more fruitfully for the benefit of the economy, and together these two things have the potential to exaggerate what the Centre and the state are doing,” he explained.

Hailing the high growth rate of Odisha this year, Jaitley said, “If Odisha’s GDP grows faster than the national GDP, it will also help in improving the GDP of the country.”

He said the Odisha government will have complete support of the central government for its Make in Odisha campaign. “Odisha, a state which conventionally had a very high percentage of people below the poverty line, is now trying to improve its growth rate. And this rate has improved significantly in recent times. Poverty levels have come down,” he said.

Odisha registered a GDP of 9.2 percent, two percent higher than the national GDP.

First Published On : Dec 1, 2016 21:05 IST

LS passes major tax bill without debate

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Amidst pandemonium, the Lok Sabha on Tuesday passed a major taxation bill to amend the Income Tax Act without a debate to facilitate levy of 60 per cent tax on undisclosed income or investment or cash credit deposited in banks after the November 8 demonetization. Speaker Sumitra Mahajan rejected amendments submitted by Kerala’s Revolutionary Socialist Party’s lone MP N K Premchandran. The bill gives the depositors a choice to admit voluntarily the black money so deposited and pay 50 per cent as tax and penalty or lose 85 per cent of the unexplained cash not admitted. Those volunteering will be able to use only 25 per cent of the money while putting the rest 25 per cent locked up for four year in the new Pradhan Mantri Garib Kalyan (PMGK) scheme.Introducing the bill, Finance Minister Arun Jaitley also emphasized that the government will stick to the deadline for depositing the high-value notes that were banned earlier this month. The old notes must be submitted to bank branches before they close on December 30.The legislation was brought before the Lok Sabha as a money bill, it will not have to pass the test of the Rajya Sabha, where the government is in minority. It will now go to the Rajya Sabha for debate and consideration, before heading to the President for his stamp. The Rajya Sabha cannot amend a money bill but it can make non-binding recommendations to the Lok Sabha. Jaitley, asserted that it will plug the loopholes in the existing laws to ensure that tax evaders are not able to legalise their black money. “The aim is to ensure this money comes into the mainstream. The rich’s black money will be used for the welfare of the poor,” he declared.Throughout proceedings, the Opposition benches were up in arms, protesting the introduction of the important bill. They called it another scam of the government’s compromise to leave half of the black money with the crooks, who won’t mind sharing half of their ill-gotten wealth with the government. An MP shouted that a culprit selling property in Rs 40 lakhs by cheque and another Rs 20 lakh in cash won’t mind losing Rs 10 lakh and pocket another Rs 10 lakh as black money. The NDA ally Telugu Desam Party (TDP) MP Dr Sivaprasad, who was dressed in black, said people with black money are laughing at this act and the common man is weeping.The Speaker rejected the demand that the bill should be taken up at a time when the proceedings of the House were in order. The House was adjourned thrice during the pre-lunch session because of the Opposition demand to first debate on the demonetization in the presence of the PM. However, the Speaker went ahead with the bill despite the noisy scenes, citing it urgency because of which it cannot be postponed. Saugata Roy of Trinamool Congress said, “It is necessary that the House be in perfect order when such a key bill is discussed and that cannot be done until the discussion on demonetization takes place.”

Demonetisation: FM tables bill to charge 75% penalty, surcharge on undisclosed income

New Delhi: Finance Minister Arun Jaitley on Monday introduced a bill in the Lok Sabha to amend the Income Tax rules, levying a tax of 60 percent on undisclosed income or investment or cash credit deposited in the banks.

According to the Taxation Laws (Second Amendment) Bill, 2016, the declarant will have to pay a tax of 60 per cent and an additional surcharge of 25 per cent of the tax (i.e. 15 per cent of such income), resulting in a total tax amounting to approximately 75 percent.

The amending legislation also gives discretionary power to the assessing officer to increase the penalty by 10 per cent of the total tax, thus raising the outgo to 82.5 per cent (75 per cent plus 10 per cent of that amount) of the unexplained or concealed income. No deductions or set-off is allowed on this amount.

The government has also come up with an income disclosure scheme called the Pradhan Mantri Garib Kalyan Yojana (PMGKY) 2016 which allows people to deposit money in their accounts till April 1, 2017, by paying 50 per cent of the total amount — 30 per cent as tax, 10 per cent as penalty and 33 per cent of the taxed amount, that is 10 percent, as Garib Kalyan Cess.

Union Finance Minister Arun Jaitley. PTI file photo

The duration of the scheme will be announced later. The declarant will get immunity from prosecution under any law.

However, those who are prosecuted under the Naroctics Act, the Prevention of Money Laundering Act, or for holding ‘benami’ (by proxy) properties and smuggling offences are not eligible to declare their hidden income under the scheme.

Additionally, under this scheme, 25 percent of the amount has to be locked up for four years in interest-free scheme.

“This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health and livelihood,” the Finance Ministry said in a statement.

The total amount so declared under this new income (PMGKY) will not be included in the total income of the declarant for any assessment year. No set-off is allowed under any head on this amount.

Labelling it as another chance for people having unaccounted income, brokerage firm TradingBells co-founder and CEO Amit Gupta told IANS: “It is like the earlier Income Declaration Scheme, but with a much higher penalty. It is a good move as black money will come into the system through this disclosure scheme.

“The clause of 25 percent lock-in period for four years will give a boost to the financial sector. A lot of unaccounted money will come through this. With 50 per cent tax, and 25 per cent locked in, it leaves only 25 at their disposal.”

“There are reports of people converting their black money into black again in the markets at a rate of 30-40 percent commission. A too higher rate would have defeated the purpose. Though the debate is still on if the source of the income needs to be revealed,” Gupta added.

In case of undeclared income found during Income Tax searches, a penalty of 30 percent shall be imposed by the Income Tax Department apart from the regular tax on the money, taking the total to 63 per cent. This would be done if the assessee admits to the undisclosed income and “substantiates” the manner in which the undisclosed income was derived.

However, if the assessee does not do that, the penalty would be raised to 60 per cent, in addition to the tax required to be paid or a total of 93 per cent.

In the objects and reasons statement, the Finance Minister said the amendment has been brought forward as “there have been representations and suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean.”

Jaitley said this would allow the government to get additional revenue for undertaking activities for the welfare of the poor, but also the remaining part of the declared income would legitimately come into the formal economy.

In the wake of demonetisation, there have been reports of people increasingly finding illegal ways of converting their black money into black again, so the amendments are on the expected lines, said global consultancy firm Protiviti India MD Nidhi Goyal.

“We were expecting such changes. The government was trying to insert a law to tackle the black money in the system post-demonetisation,” Goyal told IANS.

First Published On : Nov 28, 2016 21:54 IST

Jairam Ramesh asks Urjit Patel to quit, Arun Jaitley dubs it as unfair attack

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Finance Minister Arun Jaitley on Sunday came to the defence of RBI Governor Urjit Patel in the wake of criticism by Congress leader Jairam Ramesh, saying it is an “unfair attack” and politicians should refrain from making comments on those who cannot defend themselves.”An unfair attack by Jairam Ramesh on the RBI Governor. Must politicians attack those who can’t defend themselves in the same tone?” he said in a tweet. In an article written in National Herald, Congress spokesperson Ramesh alleged that RBI was kept in the dark by the government about its surprise demonetisation move. “Urjit Patel is either guilty of misleading the nation about RBI’s preparedness on demonetisation or has sacrificed the autonomy of RBI. Either way, he should resign,” Ramesh had said.”RBI is the monetary authority of India and is solely responsible for making bank notes available to all residents of India. If RBI headed by Patel gave its approval to the Prime Minister’s demonetisation plan, then ostensibly RBI was confident of making currency notes available easily.” He complained that there are not enough notes in the system and this shortage can continue for at least a few more weeks, if not months. Questioning the RBI Governor’s “stoic silence” through the entire currency crisis of the last two weeks, Ramesh said the central bank is independent and autonomous and needs to clarify on the current situation.”How can the head of RBI that is solely responsible for the current currency crisis not be seen clarifying and assuring the nation amid this grave crisis?” he questioned.

Demonetization to have gains in long run: Chandrababu Naidu

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Demonetization problems are temporary but the gains in the long run will be fruitful, Andhra Pradesh Chief Minister N Chandrababu Naidu said as he enlisted the steps taken by his government to help the people in this situation. The Andhra government has adopted several innovative ways to solve the problems of the people and become a role model state in the country in cashless transactions, he said.The steps taken by the state government include setting up of four committees to oversee cashless transactions, arrangement of 19,000 e-PoS (Point of Sales) machines involving students and self-helf women’s groups and starting a mobile application ‘AP Purse’. “The demonetization problems are temporary but the gains in the long run will be fruitful,” he said.The Chief Minister urged the people to endure the currency crisis for some more time to come and asked them to face it in a challenging spirit.To overcome the problems post scrapping of the high value currency of Rs 500 and Rs 1,000, the Andhra government is planning to distribute free mobile phones to people, particularly the economically-backward classes to undertake cashless transactions, Naidu said. Naidu, who has been holding teleconferences with bankers and officials to ensure that problems of people are minimised, has announced the decision to set up four committees to oversee cashless transactions, Jan Dhan bank account and Rupay dealings and overall expenditure.The state government is also planning to start ‘AP Purse’ to provide short term, middle term and long term benefits to the people. While terming as unfortunate that the demonetization problem has prolonged, he lauded the people for having patience by being in such long queues at banks and ATMs. He asked the people to make effective use of mobile currency, online transactions and debit and credit cards and Rupay cards.He has written to Union Finance Minister Arun Jaitley, seeking more funds of smaller denominations to the state to ease out the problems of people. The Chief Minister said the state government had received an additional Rs 2,000 crore, of which Rs 400 crore is in the denominations of Rs 100. He hoped that this would bring some relief to the people. Naidu said he had requested the Centre and RBI to send Rs 5,000 crore to the state. He suggested that out of this, at least Rs 1,000 crore should contain smaller denominations like Rs 10, Rs 20, Rs 50 and Rs 100.He added that the state government had earmarked Rs two crore to each of the districts, which would be of great help to small businessmen to continue their business transactions non-stop.

Demonetization is ‘anti-poor’, govt unnecessarily pressurising the nation: Congress

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Dubbing the Centre’s demonetization move as “anti-poor”, Congress leader Pradip Bhattacharya on Friday said if the government is serious about eliminating the menace of black money then it should attack the illegal cash holders.Bhattacharya said the government is unnecessarily putting burden on the nation with its hasty decision. “The government should consider the hardships of the people. If the government is serious then it should attack those having black money. It is the privilege of the people to hear the PM inside the Parliament. He heard the speeches of the opposition but did not give a reply,” he said.Bhattacharya also asked as to why Union Finance Minister Arun Jaitley did not respond to former prime minister Dr Manmohan Singh’s queries regarding the government’s move to demonetize high-value currency notes. “Jaitley ji is avoiding the real question asked by Manmohan Singh ji. The government should consider these things and should take proper measures on it. Proper measures should be taken so that the people are happy,” he added.Alleging that more than 65 people have lost their lives courtesy the demonetization drive, Dr Singh on Thursday described the Centre’s decision as a case of monumental mismanagement and warned that it would reduce GDP by at least 2% and weaken economic growth. Dr Singh asked Prime Minister Narendra Modi to find a more practical and pragmatic solution to prevent this distress on the public.Prime Minister Modi on Friday defended the government’s decision to demonetize 500 and 1000 rupee currency notes. The Prime Minister, who was speaking after releasing two books on Constitution, said some are angry on the initiative as they were not informed before the decision was considered. He said, those who are criticising the demonetization move don’t have problem with the government’s preparedness, but they are having problems because they didn’t get time to prepare for turning their black money into white.

Man tries to jump into Lok Sabha chamber from visitors’ gallery

<!– /11440465/Dna_Article_Middle_300x250_BTF –>There was commotion in the Lok Sabha on Friday when a man tried to jump into the House chamber soon after the proceedings were adjourned following protests over the demonetisation issue.Soon after the House assembled, Speaker Sumitra Mahajan adjourned the House for nearly 40 minutes following stormy Opposition protests and the members started leaving the Chamber.Suddenly, an Opposition member, who had earlier trooped into the Well, pointed out that security personnel in the Visitors’ Gallery were grappling with a person whose right foot was hanging from the wooden fence.He was caught and lifted up by about 4-5 alert personnel.It then transpired that the man had tried to jump into the Lok Sabha Chamber.The man was caught and then bundled out. The other visitors were then guided out of the gallery which is right opposite the press enclosure.Delhi Police personnel in plain clothes are usually seated in the front rows of the Visitors’ Gallery to prevent such incidents.While the Speaker had left, the Prime Minister was not in the House. Senior ministers including Arun Jaitley and leaders like Mulayam Singh Yadav were in the House when the incident took place.

Manomhan finally spoke under Modi Govt, yeh hai acche din: Twitter reacts to ex-PM’s speech

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Former Prime Minister Manmohan Singh ripped apart the demonetization decision calling it a “case of organised loot and legalised plunder” and “a monumental failure” as a brief thaw marked the government- opposition stand off in Parliament with Prime Minister Narendra Modi attending Rajya Sabha for a short time.However, a little later the House plunged into chaos with Modi not returning to the proceedings after lunch, triggering an opposition demand for his presence during the entire debate that led to abrupt adjournment.The highlight of the resumed debate, which appeared to bring back normalcy in the upper house after five days of confrontation, was a brief speech by Singh who said the demonetisation and its impact on the economy would lead to dip GDP growth by at least 2 per cent.Earlier with Modi’s presence, the opposition and the ruling side came to an agreement to do away with the Question Hour and resume the debate, which had been left incomplete on November 16.Leader of the House and Finance Minister Arun Jaitley said the Prime Minister will also participate in the debate.The opposition had been demanding presence of the Prime Minister for the debate to take place. Modi attended the House during Question Hour as Thursday is the day of questions relating to the departments under his charge.

Maximum black money transactions took place under UPA: Arun Jaitley hits back at Manmohan Singh

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Taking a dig at the opposition who have decided to launch ‘Aakrosh’ (anguish) Day over the demonetization issue, Finance Minister Arun Jaitley on Thursday said people are only happy about the government’s decision and it is the few opposition parties who are ‘Aakrosh’ about the decision.Launching a scathing attack on the Congress after former prime minister Manmohan Singh termed the demonetization issue to be a blunder, Jaitley said that it was ironical of the previous government to consider it a blunder since it was under then that the black money transactions had become glaring and rampant.‘We were not surprised when we heard from those who ran the government between 2004 and 2014 that they didn’t like these anti-black money steps. The maximum black money was generated in the country between 2004 and 2014. Commonwealth Games scandal, the 2G corruption scandal, the coal block scandal all took place during this period,’ he said.‘Those who didn’t consider these scandals to be a blunder are now considering this campaign against corruption and black money to be a blunder,’ he added.Jaitley said that instead of engaging with the government in a debate over demonetization, the Congress is ‘manufacturing reasons’ to run away from the debate.Responding to Dr. Singh claims that the demonetization will weaken the Indian economy and adversely impact the GDP of the country, Jaitley said, ‘‘as far as the medium and long term impact on the economy is concerned, including on India’s GDP, it is going to be a positive impact. Lot of money that operates in the shadow economy will now be a part of banking structure. The banks will have a lot more to support the economy. The private sector investment which was so far lacking will now be back into the economy.’He said that the banks which were hitherto struggling because of the NPA problem would have a lot more money to lend for agriculture, infrastructure, social sector and the possibility of banks lending at lower cost would also rise.‘Additionally, when more and more transactions comes into the banking network in the long run, you will find taxation, both direct and indirect, improving therefore in the medium and long term, it will have a positive impact,’ he said.Stepping up the opposition tirade against demonetization, former Prime Minister Manmohan Singh today castigated the government and the Prime Minister over the move, saying its implementation was a “monumental management failure” and a case of “organised loot and legalised plunder.” Singh, who spoke in the presence of Prime Minister Narendra Modi in Rajya Sabha, said the decision will result in decline of GDP by 2 per cent, it being an “under-estimate”. He hoped the Prime Minister will find a practical and pragmatic decision to mitigate the sufferings of the common man and the poor who have been in distress after the decision. He said agriculture, unorganised sectors and small industry has also been hit hard by it and people were losing faith in the currency and banking system. “These measures convinced me that the way the scheme has been implemented, it’s a monumental management failure. And in fact, it is a case of organised loot and legalised plunder. “It is not my intention to pick holes what this side or other side does. But I sincerely hope that the PM even in this late hour will help find us practical and pragmatic ways to provide relief to the suffering of the people of this country,” he said in Rajya Sabha as the debate on the issue resumed after Modi came into the House.Earlier, Leader of Opposition Ghulam Nabi Azad requested Chairman Hamid Ansari and Leader of the House Arun Jaitley that the Question Hour should not be taken up as the Prime Minister was present in the House and the debate be taken up.Azad’s request was readily accepted by the government with Jaitley saying that the debate should start immediately and Modi will certainly participate in it.Participating in the resumed debate, Singh said it is important to take note of the grievances of the ordinary people who have suffered as a result of this imposition on the country “overnight” by the Prime Minister.”My own feeling is that the national income, that is the GDP of the country, can decline by about 2 percentage points as a result of what has been done. This is an under-estimate and not an over-estimate.”Therefore, I feel the Prime Minister must come with some constructive proposal on how we can implement the scheme and at the same time prevent the distrust that has been caused to the common people,” Singh said. The former Prime Minister did not agree with the Prime Minister’s plea to wait for 50 days for the results of demonetization to come about, saying no one knows about the final outcome of the decision.”Well 50 days is a short period, but for those who are poor and deprived sections of the community even 50 days of torture can bring about disastrous effect. And that’s why about 60 to 65 people have lost their lives. Maybe more.”What is more is, what has been done can weaken and erode our people’s confidence in the currency system and in the banking system,” he said.Asking Modi to spell out the names of countries where people have deposited their money in banks but are not allowed to withdraw their money, he said, “this alone I think is enough to condemn what has been done in the name of greater growth.”He said the scheme of demonetization, the way it is being implemented, will hurt agricultural growth in our country, small industry and all those people who work in the informal sectors of the economy. Singh, an eminent economist, criticised the government for issuing fresh instructions and modifying the rules every day on the conditions under which people can withdraw their money.”That reflects very poorly on the Prime Minister’s Office, the Finance Minister’s office and on the Reserve Bank of India. I am very sorry that the Reserve Bank has been exposed to this kind of criticism which I think is fully justified,” the former Prime Minister said. He said though he agreed with the objectives of the scheme to demonetise currency notes of Rs 500 and Rs 1000 as spelt out by the Prime Minister, he wished to highlight the problems that the common people and poor have been subjected to by the move.”But I do want to point out at least that in the process of demonetization monumental mismanagement has been undertaken about which today there is no two opinions in the country as a whole,” he said.Referring to those saying that the move which was doing harm and creating distrust in the short run was good in the long run, Singh quoted John Maynard Keynes to say that “in the long run, all of us are dead”.”I urge upon the Prime Minister to find practical, pragmatic ways and measures to relieve the distress of the people, who happen to be a great majority of our people. After all 90 per cent of our people were in the informal sector, 55 per cent of our workers in agriculture are feeling distress,” he said.He also noted that the cooperative banking system which served large number of people in rural areas was non-functional and has been prevented from handling cash.The senior Congress leader said though it is not his intention to pick holes in what this side or other side does, but hoped that the Prime Minister “even in this late hour will help find us practical and pragmatic ways to provide relief to the suffering of the people of this country”. With inputs from agencies

Demonetization: Not an end, but beginning, says PM Modi

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Prime Minister Narendra Modi’s voice cracked more than once at the BJP parliamentary party meeting, the first after he had announced demonetization, even as he reaffirmed his unwavering resolve to take forward the battle against black money.At a time when the Opposition had united to take on the government over the inconvenience faced by the common man over demonetization, the PM is understood to have said at the meeting on Tuesday morning, that he had won over the country’s support beyond his own expectations.According to sources, Modi had said that he had come to power “na apne liye, na apnon ke liye (neither for myself nor for my own)” but for the sake of the poor for whose welfare he would continue to work. Sources said that as the PM spoke, his voice choked with emotion.At the outset of the meeting, Modi dismissed the comparison between demonetization and surgical strikes saying that whatever others may say, the BJP must not equate the two, as these were two different issues. Speaking about the surgical strikes, the PM recalled the six to twelve-hour operation, where Army personnel had risked their lives crossing the LoC. “It was a mahaan (noble) exercise,” sources quoted the PM as saying.On the issue of demonetization, the PM said he had taken steps to correct a system which had seen increasing corruption over the past 70 years and “when changes are made in the system, there will be difficulties.”The PM also added that the poor had been suffering for 70 years because of corruption and black money and that the fight against corruption would not end with demonetization. “This is just the beginning of a deep and constant battle, not the end,” he said.At the meeting, the PM also adopted a two-page resolution hailing demonetization as “historic, revolutionary and pro-poor”. The resolution, which got a standing ovation, sought the support of party MPs to go to the people and explain issues like black money, fake currency and terror funding. The PM also underlined the fact that he was not worried about Opposition criticism; he said he had asked the people for 50 days and would assure them a “new India in the new year”.And in an answer to critics that stated that the move was too sudden, the PM also said that he had not hidden anything from the people of the country and that he had been talking of a cashless economy and cautioning of action after September, the deadline for disclosure of unaccounted wealth.Post the party meeting, Finance Minister Arun Jaitley briefed party MPs, and this was telecast live by Doordarshan. Jaitley said the Prime Minister had created a “new normal” by “stopping the normal of the last 70 years”. He also described demonetization as a “historic decision which required courage”.The Prime Minister again stressed his personal commitment to demonetization and fighting corruption. Later in the day at a function commemorating party stalwart Kedarnath Sahni, Modi again touched on the subject of demonetization and made a veiled attack on opponents saying it was unfortunate that some people were speaking in favour of black money and corruption. He called for standing up against the “mindset of compromise” and said Sahni was an epitome of that.”Why should we a have to accept corruption & black money as things that are a part of system. We have to think about the future, no compromises,” he said at release of Kedarnath Sahni’s ‘Smriti Granth’.He added that there may be people who did not have the courage to fight corruption but those who “carry the flag of corruption” will not be forgiven by future generations. He went on to say that there should be a pre-condition of being untainted to those who remain in public life.The PM’s efforts however failed to pass muster with the Opposition, which has been engaged in a standoff with the government in Parliament. Senior Congress leaders said that it was high time that the PM stop selling dreams.”It’s high time for the PM to address concerns of the nation post-demonetization… By shedding crocodile tears, the PM cannot fool this country. Modiji needs to start dealing with governance. He should stop selling just dreams,” said Congress spokesperson Randeep Surjewala.Surjewala also regretted the fact that the Prime Minister and Finance Minister did not even know when the Rabi sowing season begins. “They are giving lectures today that the Rabi season is about to begin and so are giving relief to farmers to buy seeds and fertilisers. You must know Rabi season started 25 days ago… The sowing season is about to get over when you are relaxing money withdrawals by farmers from banks.””A country where the Prime Minister and Finance Minister do not even know when the wheat crop is grown, how will that country tackle this crisis and how will the agri-economy prosper,” Surjewala asked.

Demonetisation: Modi must act soon or historic move will become ‘historic blunder’

Just like the important role he played in building political and economic consensus among warring parties for the Goods and Services Tax (GST) roll out, Finance Minister, Arun Jaitley is doing his best to allay concerns of the aam aadmi during the demonetisation exercise. The FM did this again on Tuesday when he said the government will focus on rural areas in the next few weeks to make new currency available and ease the pain of farmers in the upcoming Rabi season.

Prime minister Narendra Modi. PTIPrime minister Narendra Modi. PTI

Prime minister Narendra Modi. PTI

Demonetisation is a ‘historic step’ taken by the Prime Minister Modi to bring a ‘new normal’ to the Indian economy, the FM said. True, the Modi-government’s move will, once the short-term pain is over, contribute to transforming the economy in long-term, though demonetisation itself isn’t enough to achieve this objective. This needs to be followed up with a series of steps including bringing awareness to the citizen about cashless payments, addressing corruption at grassroot level, generating jobs and bringing in private investments. PM Modi too made an emotional speech on two occasions defending his government’s decision.

But, what the government shouldn’t miss here is the point that there is a large economic consequence of the current cash crunch, if it prolongs beyond this point. Unless the government urgently address certain areas of economy besides the agriculture, the ‘historic step’ could very well turn out to be a historic ‘blunder’ for PM Modi by impeding the economic growth momentum and taking the economy back to few notches below.

To be sure, Jaitley is right in identifying agriculture as a priority area for making currency available. The Rabi season is approaching and the farmer on the field needs cash, not just to buy seeds and farming equipment but also to take care of his family’s basic needs. The small farmer doesn’t earn a monthly salary, nor has any major savings. The Kisan credit cards offered to him enables him draw money, but only if bank or ATM dispenses cash.

But so are urban workers in the construction sector. The shortage of cash has impacted thousands of labourers who draw wages in cash on daily basis. If these labourers stop work, the construction activities can suffer which will have an immediate drag on broader economy. All other related segments—cement production and electricity will feel the heat. Hence the government should think of ways to make cash available to the urban worker too.

This argument holds for our vegetable vendors, meat sellers, small food stall owners, taxiwallas, hundreds of cooperative banks across the country and thousands of small and medium enterprises and start-ups. These segments too are key contributors to the economy by way of spending and contributing to the production chain. Much of these segments operate in cash economy and the sudden withdrawal of currencies and withdrawal restrictions have hit them hard. Even the spending by the salaried segment would have likely come down on account of cash shortage. To add to the problems, even people with cash in their hands will be hesitant or reduce spending thinking of cash shortage ahead. All this suggests that the economy on the ground will suffer if the problem persists.

International agencies have already begun warning on the likely slowdown to the economy post demonetisation. “While leading indicators point to a stabilisation in the first quarter of 2017, demonetisation is likely to exacerbate the near-term slowdown due to temporary cash shortage. Pre-demonetisation data suggest activity is likely to stabilise in the first quarter,” Japanese brokerage Nomura said in a note today, adding that consumption is the “brightest spot” for the economy. Due to a temporary cash shortage, we see a risk that GDP growth could slow to 6.5 percent in the fourth quarter,” Japanese brokerage, Nomura, said in its research report on Monday.

The cascading impact of slow-spending slow-production can actually cause a drag in the economic recovery process. In an interview given to Economic Times, development economist Jean Drèze said demonetisation is “Demonetisation in a booming economy is like shooting at the tyres of a racing car.”

“Demonetisation on this scale is a huge gamble with the economy. The full consequences are difficult to predict. The best-case scenario is that the economy will stay the course, after the initial disruption, and that significant sums of black money will be neutralised. The worst-case scenario is a prolonged economic slowdown, with very little result in terms of preventing illegal activity,” Drèze said.

Even the intended result of the demonetisation exercise is disputed by the likes of globally renowned economist, Larry Summers, a former chief economist of the World Bank and ex-economic advisor to the US President, who said the move is unlikely to have any lasting benefits to the economy.

What should be done to ease the cash crunch in the system? As Shankkar Aiyar suggests in this new Indian Express column, the government can think of innovative ways to ease the cash crunch, such as asking retailers to use their vast network of outlets for cash disbursements, promote online Payments and incentivise point of sales machines. If printing notes domestically is beyond the capacity of government mints in short time, the government can also plan outsourcing printing like in 1997-98, Aiyar writes.

The bottomline is this: If the current cash crunch translates to a prolonged subdued spending and production slowdown, the ripple-effects in the economy will have a serious bearing on the growth momentum. If the government manages to find ways to tackle the printing and supply issues of currency and make things normal at the earliest, it can regain the lost glory of this bold reform move. Else, one shouldn’t be surprised if the historic step is termed by some as a ‘historic blunder’.

First Published On : Nov 22, 2016 15:14 IST

Demonetization just a ‘beginning’ in fight against black money, says PM Modi in emotional appeal to BJP lawmakers

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Making an emotional address to Bharatiya Janata Party(BJP) lawmakers, Prime Minister Narendra Modi on Tuesday asserted that the demonetization of high value currency is just a beginning of his government’s deep and continuous struggle against black money.Addressing the BJP Parliamentary Party meeting, the Prime Minister said that the decision is in the interest of poor and middle class, adding that his government is dedicated to eradicate the evils of black money and corruption which have affected people in the last 70 years.Following the meeting, Parliamentary Affairs Minister Ananth Kumar informed that the Prime Minister has described the demonetization move as a step for the security and welfare of the poor people.Speaking in the meeting, Finance Minister Arun Jaitley said, the entire country is welcoming the decision and that the move will work as a catalyst to boost the digital economy.”This is a historic decision. The entire nation is welcoming it. By stopping the ‘normal’ of last 70 years, Prime Minister Modi has created a new ‘normal’,” said Jaitley, while reiterating that the government is ready for discussion on the issue in Parliament.The BJP Parliamentary Party also passed a unanimous resolution congratulating the Prime Minister for the demonetization.Reading out the resolution, Information and Broadcasting Minister Venkaiah Naidu said, the demonetization will hit the financial support to the terror outfits.Meanwhile, the Parliament continued to witness tumultuous scenes as the opposition remained adamant on its demand for the Prime Minister’s presence in the House.

DNA Morning Must Reads: Tsunami hits Japan after 7.4 magnitude quake, latest on demonetization, and more

<!– /11440465/Dna_Article_Middle_300x250_BTF –>1. Tsunami hits Japan after strong quake of 7.4 magnitude, nuclear plant briefly disruptedMagnitude 7.4 quake strikes near Japan coast early Tuesday. Read more.2. Demonetization: RBI gives borrowers extra 60 days to repay home, car loans up to Rs 1 croreAllows both individuals and companies with loans up to Rs 1 crore an additional grace period of 60 days to repay their loans. Read more.3. Amid House logjam, government and BJP firefight oppn’s note ban offensiveAmit Shah meets Jaitley in Parliament as Opposition parties unite to confront govt over impact of demonetization. Read more.4. Dismiss BCCI top guns, appoint Pillai as observer: Lodha panelIn a status report submitted on Monday, the third one till date, Justice Lodha panel has recommended this move in order to pave way for the implementation of its July 18 orders in toto.Read more.5. We have to take the hint: Arjun KapoorArjun Kapoor on the way ahead and beating Hollywood at their own game. Read more.

Government’s new steps to aid farmers, exporters

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Concerned over reports of rural distrust and the Opposition’s plans for a nation-wide stir, Prime Minister Narendra Modi along with Finance Minister Arun Jaitley met top officials on Monday to review the impact of the ban on higher denomination notes in far-flung rural areas.Recently, the top brass of the BJP have been reviewing plans to ease any negative impact of demonetization in these areas and in this regard BJP president Amit Shah and Jaitley held a separate meeting on Monday. This meeting saw discussions on a variety of sops that could be put in place to improve the cash flow to the general public.Sources said the prime minister has already directed the finance ministry to ensure better availability of cash in rural areas. Earlier also, the government had announced a slew of measures to help farmers, one of them being that farmers could purchase seeds with old high-denomination notes of Rs 500. This move came after reports of distress in villages, which have poor access to banking facilities, and that farmers were finding it difficult to pay loans.A government notification, on Monday, stated that farmers could purchase seeds from any government outlet on production of proof of identity. The notification said that this revised rule was being put in place in order to support farmers harvesting the current Rabi crop.In the meantime, in another bid to bring relief to the common man, the Reserve Bank of India (RBI) on Monday also provided an additional 60 days for repayment of housing, car, farm and other loans worth up to Rs 1 crore. This is applicable to loans payable between November 1 and December 31, the RBI said in a notification.Government sources said that the Centre had also been listening to its allies, the Akali Dal and the Shiv Sena, who have placed forth a list of demands which are being taken forward. Sources say the Centre is considering putting money into cooperative banks and then disbursing it through organisations such as NABARD (National Bank for Agriculture and Rural Development) to help people in far-flung rural areas. Punjab Chief Minister Parkash Singh Badal has also asked the Centre to include cooperative banks in the system of dispensing alternative currency.The problems faced by farmers are also on the mind of the Shiv Sena. Earlier, the Sena had joined a protest march by Mamata Banerjee-led Trinamool Congress, where the latter had submitted a memorandum to President Pranab Mukherjee demanding the immediate rollback of demonetization. The Sena however did not sign that memorandum and instead submitted a separate memorandum seeking permission for district cooperative banks to accept old scrapped notes up to December 30. This permission has already been granted to other commercial banks and post offices.There are already reports that India’s exports of one million bales of cotton have been delayed due to demonetization, driving up prices to levels higher than in the global market. This has forced buyers to switch to other producers like the United States, Brazil and other African countries.Despite such measures, official sources admit that economic growth will be slower in the first quarter, but add that the economy is expected to pick up once the banks are flush with money. Top sources in the government expect that a dip in sales or any visible negative impact on the economy would be a temporary phase and would outweigh long term gains. They add that the government expects banks to cut interest rates sharply on account of the surge in deposits. Such a move is expected to ensure public spending and a larger tax base. More ATMs are also expected to be set up across the country to deal with consumer demand.Apart from these measures to address rural distress, the government also increased the cash limit withdrawal for farmers to Rs.25,000 per week from their Know Your Customer (KYC) compliant accounts subject to the normal loan limits and conditions, apart from the other facilities announced on November 17.It’s not just farmers that the government is keeping an eye on. The government is also looking at exporters and sources say, there is a move to increase the cash withdrawal limit for them as well. Reports reveal that the cash crunch post-demonetization had caused some exporters to shut shop or scale down production.In this regard, export promotion councils have approached Commerce and Industry Minister Nirmala Sitharaman on Monday to ask the government to increase the cash withdrawal amount for them and the minister had assured them that she would take up their demand.

Arun Jaitley’s defamation case: SC defers hearing on Kejriwal’s plea

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Supreme Court deferred the hearing till Tuesday on the appeal of Delhi Chief Minister Arvind Kejriwal seeking a stay on the trial court proceedings in a criminal defamation case filed against him by Finance Minister Arun Jaitley. A bench of Justices PC Ghose and UU Lalit was informed by the counsel for Kejriwal that senior lawyer Ram Jethmalani would argue the case and he was not available on Monday which led to adjournment of the hearing.The Delhi High Court had on October 19 dismissed his plea seeking stay of trial court proceedings in a criminal defamation case, saying, there was no “illegality” in continuing it simultaneously with a civil defamation suit in the high court. The high court had said there was “no prejudice” on account of a pending civil suit and there was no “double jeopardy” and as such Kejriwal’s plea was “devoid of merit”.It had said the criminal and civil defamation cases were “different in nature”. Kejriwal had contented that proceedings before the trial court should be stayed since a civil suit was pending before the high court and both cannot proceed simultaneously.Regarding the challenge to the magisterial court’s May 19 order dismissing Kejriwal’s plea to grant stay on proceedings due to pendency of civil suit, the high court had said that the trial court order was “free from perversity, impropriety, illegality and non-sustainability”.The high court also opined that there was no bar on a magistrate taking cognisance of the offence, which he may be of the opinion is said to have been committed by a person whose matter is still pending in a civil court. Besides a civil defamation suit in the high court, Jaitley had also filed a criminal defamation complaint in a lower court alleging Kejriwal and five AAP leaders — Raghav Chadha, Kumar Vishwas, Ashutosh, Sanjay Singh and Deepak Bajpai — had defamed him in the Delhi District Cricket Association (DDCA) controversy.

Maharashtra: Like Mallya, waive off my loan as well, safai worker writes to SBI

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Amid the controversy over public sector lender SBI reportedly writing off loans worth Rs 7,000 crore, including that of Vijay Mallya-promoted Kingfisher Airlines, a sanitation worker in Nashik has written to the SBI, seeking a ‘similar’ waiver of his Rs 1.5 lakh loan.Bhaurao Sonawane, a safai worker with the Trimbakeshwar municipal council in Maharashtra’s Nashik district, said he had written to the SBI, seeking waiver of his loan, “in the same manner in which the bank waived off Mallya’s loan”.”I have written a letter to the bank, congratulating it for the ‘good decision’ to waive off Mallya’s loan. I requested SBI to waive off my loan as well,” Sonawane told PTI.”I took this loan to meet expenses on my son’s illness,” he said, adding that the bank manager is yet to respond to the letter.Sonawane’s demand comes against the backdrop of Finance minister Arun Jaitley asking opposition members in the Rajya Sabha not to go by the literal meaning of write-off.”So there is a little bit of malapropism involved in this. Don’t go by literal meaning write-off. Write-off does not mean loan waiver. Loan still remains. You still continue to pursue,” Jaitley had said, during a debate in the House on the government’s demonetization action.Jaitley was replying to CPI(M) leader Sitaram Yechury who referred to a newspaper report which said SBI wrote off loans of wilful defaulters including Rs 1,200 crore of Kingfisher Airlines.

Demonetisation: Narendra Modi can shore up his popularity in these five steps

In the alpha-male club of unabashed nationalists now ruling the world, India’s Prime Minister Narendra Modi is said to be the cleverest. The cleverest politician that is (no prizes for guessing who’s the dumbest).

Vladimir Putin has never had to win a free and fair election, Recip Erdogan is fast losing his democratic credentials with his ruthless suppression of all critics while Donald Trump is still a work in progress. But Narendra Modi, despite his dubious track record, could sell himself, unlike his American fanboy, as a messiah of hope rather than a symbol of fear and hatred.

Suddenly, flattering words from the world’s richest man notwithstanding, Modi’s smarts are being called into question and all because of a “bold, decisive” declaration that is wholly in character with his intrepid, strong-man image. This is what he is admired for, this is what he was voted in for, this is how he is delivering.

Yet, even his most devout bhakts are finding it difficult to explain away the unravelling of the whole demonetisation exercise into a muddle of ill-thought-out, un-planned, amateurish incompetence that is calling into question not just the execution but even the justification for the shock therapy itself.

In sum, a looming political disaster. Not at all what was scripted. Politics underpinned the whole exercise from the word go. Black money could have been targeted by an administrative procedure too. Then there would have been no need for the Prime Minister to come on prime time television to make the announcement that midnight would turn 500- and 1000-rupee notes into pumpkins; a directive from the Reserve Bank of India Governor would have sufficed.

But Narendra Modi would not be the world’s canniest politician if he had left such a mega headline-grabber to a mere bureaucrat. A personal message from him not only drove home the enormity of the scheme but also highlighted his daring and his commitment to his promises.

Only, now it has left him, and him alone, holding the bag. For a party that cannot even express full-throated sympathy for the sufferings wrought by demonetisation until the Prime Minister returned from Japan and gave them the cue, this is calamity indeed.

So, some quick fixes are inevitable. Even essential. Here are five steps the Prime Minister may take to shore up his popularity among the waverers.

People queuing up outisde ATM in Allahabad. PTI

People queuing up outisde ATM in Allahabad. PTI

Find a scapegoat

The hunt for a scapegoat is already on. Or so it would appear, from the way some loyalists have been pointing fingers. Well, heads do roll after a fiasco (think Volkswagen currently). But in this case it’s not that easy.

Many, even the Opposition (save Mamata Banerjee and a few economists who will dutifully be dismissed as left-wing), concede that the fault is not so much in the policy of demonetisation itself as in its execution. And the litany of failures, from the shortage of 100-rupee notes to the delay in the printing of 500-rupee notes, the uselessness and ugliness of the brand new 2000-rupee note, the unpreparedness vis-à-vis ATMs, the chopping and changing of orders every second day, is quite mind-boggling.

Obviously, the Prime Minister is above all this. His is the big picture, but the devil is always in the details. And there are several who dealt with the details.

People are already looking askance at the Governor of the RBI as it is his brief to keep track of the country’s money supply, match the demand with the supply of notes, arrange for their printing, etc. It seems someone in his team made a huge miscalculation, the note count went all awry, the banks ran dry.

But how can Urjit Patel be the fall guy? Not after the way the government patted itself on the back for having found a low-profile, tongue-tied governor to replace the media-savvy, articulate Raghuram Rajan. That would be eating crow and this government has no taste for that.

Subramanian Swamy of course has wasted no time targeting his pet hate, his own party’s finance minister. It would, without doubt, be as big a bang as the project itself if Modi sacrificed the suave Arun Jaitley at the altar of public sentiment but Dr Swamy is sure to be disappointed again.

True, Arun Jaitley’s uncharacteristic reticence in the Rajya Sabha on Wednesday did elicit quips from Opposition leaders. The finance minister had also floundered at press conferences, turning frequently to his minions for answers on, say, how many times a person could exchange old notes (“unlimited” – only to be superseded a couple of days later with the one-time inking decision).

Still, his emphatic denial of any possibility of a rollback and his insistence that the execution was flawless, “it couldn’t have been done better,” he told The Economic Times, dispels any notion that Jaitley is going anywhere from the South Block.

There are of course bureaucrats in his ministry, led by finance secretary Ashok Lavasa and revenue secretary Hasmukh Adhia, who have been slaving away on this project for the last ten months at least but axing such faceless entities will serve no political purpose. Except, maybe, one. Namely, economic affairs secretary Shaktikanta Das, now a familiar face and a household name across the country.

On the 8th, explaining the modus operandi after the Prime Minister’s bombshell, Das had looked ebullient and enthusiastic. Today, after continuously contradicting his own earlier pronouncements day after day, he looks grey and hunted. February can’t come soon enough for him, when he is scheduled to retire. Unless… A scapegoat is vital for the greater good.

Prime Minister Narendra Modi. Reuters

Prime Minister Narendra Modi. Reuters

More whizz and bang

The security guard in my building was grinning from ear to ear. Why? He had already exchanged his big notes, I knew. Then? Well, there’s this private nursing home owned by a doctor near his house on the outskirts of the city. They’d raided the doc two days ago and found a crore of rupees under his bed. The doctor, the guard informed me gleefully, was now a patient in his own hospital.

It doesn’t take much to appease the masses. Raid some big guns, name and shame them, hold them up as examples of the government’s implacable resolve to level the playing field and the deaths and privations and standing in endless queues will be distant memories.

Of course, it has to be really big guns, at least a few of those said to be close to the powers that be have to be caught in the dragnet. Whether they are as expendable to the Prime Minister as the BJP’s core constituency of small traders we shall soon find out. But hope is eternal.

The Prime Minister has already promised (or threatened) that demonetisation was only the beginning, more fireworks are on the cards. Well, they’d better not be limited to tame measures like tax reforms, interest rate reduction, making PAN cards mandatory for jewellery and real estate purchases and suchlike, not if he wants to really light a fire under his people.

Of course, schadenfreude is hardly the basis for a well-adjusted society but no one can accuse Narendra Modi of caring overmuch for brotherly love and goodwill between communities.

Everything is what you make of it, even yourself

Joseph Goebbels had also said, “Today there seems to be only one absolute thing: relativism.”

However much we elites may cringe at Modi mobilising his 96-year-old mother in the service of his pet project, or “the greater good” as the bhakts would have it, it only underlines the huge gap that separates people like us from Modi’s support base. Modi knows what he is about. He has, they say, an unerring finger on the pulse of the masses and his recent speeches seem to reflect just that.

His hyperbole knows no bounds when the situation calls for it. Remember his, kill me before you lay a hand on my dalit brothers speech to gau rakshaks after letting them run riot for months. Now he warns his flock that his very life may be imperilled by his cleansing mission.

Irony is dead, so he had no inhibition in declaring he was completing Nehru’s unfinished task with his drive against black money. Sarcasm, the lowest form of wit, is in so he could gloat there was a wedding in the family but only 4000 rupees in hand or that “Those involved in corruption had to stand in line for Rs 4,000.”

The people roared in approval. But difficult days lie ahead. As people in rural areas realise what has hit them, as businesses, especially small businesses even in urban areas, plummet, as savings are lost and lives ruined, people may begin to question and turn.

That is when the floodgates to more emotional speeches will be opened. With elections round the corner there’ll be occasion enough. And the masses may truly end up forgetting the birthpangs of a corruption-free India, as Modi’s men are repeating ad infinitum.

It’s not just that the public’s memory is proverbially short. People want to believe the Prime Minister. The initial reaction to his announcement on November 8 night had been truly electric. Economists may quibble about its benefits but to ordinary people it was a great equaliser. The rich couldn’t buy their way out of this one, they snickered.

Even the fact that there hasn’t been any rioting on the streets or major unrest is seen by government apologists as a sign of the public’s widespread support for the Prime Minister’s grand scheme.

Of course, achhe din will have to materialise soon for people to keep their faith. Else, hell hath no fury as a public betrayed.

Woo back his core constituency

“What we are witnessing is something quite fascinating – the ability of an elected leader to use his mandate to look beyond sectional interests and address the national interest,” gushed Rajya Sabha MP Swapan Dasgupta in the Times of India for the Prime Minister cutting loose the BJP’s traditional support base of small traders and businessmen who deal mainly in cash.

But can Modi really be so cavalier towards such loyal supporters? Especially when GST is poised to hurt them even more.

Some say this’ll help him widen his support base but that comes with a big if. No, Modi will not dump his faithfuls so cruelly. What he has taken away with one hand he’ll make up with another. Silent, below the radar operations that’ll be noticed by only the pink papers.

Wage a war, literally

If the Prime Minister hasn’t seen the 1997 movie Wag the Dog, now is the time to download it. Not as a break from the unrelenting demonetisation demon that’s darkening his days, but for educational purposes. Anupam Kher could surely help him here.

He needn’t even resort to a fake war as they did in the film to save an American President from public wrath and win him a second term.

As one of its lead characters put it, “You can’t have a war without an enemy… You could have one, but it would be a very dull war…” Our leader has an enemy right at hand.

Just as the Jan Dhan Yojana, Aadhar and direct benefit transfers, incentives for e-payments, etc. are said to have laid the groundwork for demonetisation, the foundations for a war with Pakistan are already in place. The soldiers are readied, the populace is primed, the defence minister eager to retract India’s self-imposed ‘no first use of atomic bombs’ dictum. A “fan of the Hindu” will soon be moving into the White House.

One can only hope the first four steps will make the fifth redundant.

First Published On : Nov 19, 2016 17:30 IST

Demonetization: Queues getting shorter at banks; long wait at ATMs continues

<!– /11440465/Dna_Article_Middle_300x250_BTF –>After ten days of demonetization of high value notes, many banks have now started witnessing shorter queues following some restrictions on exchange of defunct bills, but people were still seen waiting in frustration at ATMs due to cash scarcity. All banks will serve only their respective customers on Saturday and will not exchange the old Rs 500 and Rs 1,000 notes from customers of other banks.However, this restriction is not applicable on senior citizens as they are allowed to visit any bank branches to exchange old defunct currency notes. The exchange limit has already been less than halved to Rs 2,000 to ease some pressure on cash demand. Finance Minister Arun Jaitley said the rush at bank branches has come down significantly and that there is absolutely no panic. “Queues have become extremely small and this is all over the country,” Jaitley had said.To screen repeat customers, banks at many places are applying indelible ink mark on fingers of people who are exchanging notes. With the government and RBI struggling to manage cash availability across the country, the small businesses from vegetable vendors to dhabas and small kirana stores that use cash as mode of transaction were the hit. People faced inconvenience in purchasing milk, vegetables, medicines as they did not have adequate small currency notes.At various hospitals across the country, patients and their family members are facing inconvenience in buying medicines, food and availing transportation. A bulk of daily labourers were rendered jobless as construction and other activities came to a standstill in the wake of cement, sand and other supplies not coming in. To ease inconvenience to the people, government has allowed withdrawals up to Rs 2.5 lakh for weddings and up to Rs 50,000 for farmers.Prime Minister Narendra Modi had on November 8 surprised citizens by announcing demonetization of 500 and 1,000 rupee notes and since then large number of seemingly unending queues before banks and post offices are seen in order to exchange these currencies.

Demonetisation LIVE: Banks across India to serve senior citizens on Saturday, to remain shut on Sunday

Unnecessary panic spread on demonetisation; no roll back: Arun Jaitley

New Delhi: Digging in his heels, Finance Minister Arun Jaitley on Thursday ruled out the roll-back of the demonetisation decision and slammed Delhi and West Bengal chief ministers accusing them of spreading “unnecessary panic”.

He said the move to demonetise the high value notes was “very well planned”, and added that the rush in bank branches is “significantly” coming down and 22,000 ATMs are getting recalibrated daily in order to dispense Rs 100, and new 500 and 2,000 rupee notes.

Criticising senior Congress leader Ghulam Nabi Azad’s comments in the Rajya Sabha, Jaitley said opposition has developed “cold feet” to debate the issue of demonetisation and criticised Azad for making irresponsible political comment.

Jaitley said he expected every responsible citizen, political party, state governments to support this huge effort because this will mean that India’s formal economy will increase, access to banking will increase, taxation quantum will increase, banks will have far more money to support the economy in terms of trade, interest rates will come down, and therefore the kind of economy it will generate is huge.

“Now unnecessary panic is being spread particularly by some individuals and I didn’t expect Chief Ministers of one or two states to join in this effort,” Jaitley told ANI.

Rejecting the demand of political parties like Aam Admi Party and Trinamool Congress, he said, “whatever AAP and Trinamool Congress said about the roll back, there is no question of that.

It is a clear decision of the Prime Minister and government to cleanse politics and economy of the country. We will stick to it (demonetisation)”. Jaitley questioned the “vested interest” of Congress party in opposing government’s effort to root out black money.

“At the end of the day, this exercise will only succeed in rooting out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this,” he said.

Jaitley also criticised certain comments of Leader of Opposition in the Rajya Sabha and senior Congress Ghulam Nabi Azad during the debate on demonetisation.

He added: “What is the vested interest of Congress party in opposing this campaign to root out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this.”

On why the government was targeting only cash to unearth black money, Jaitley said it was necessary to squeeze cash to prevent generation of more black money.

“You have to squeeze cash because black money generates more black money. Not whatever is in assets is a matter of assessment by the income tax authorities. But whatever is lying in hard cash so that it does not generate anything for the future, has to be squeezed out,” he added.

Jaitley also dismissed the criticism that banks have written off loans belonging to large industrial houses.

“That is completely a false statement. These were loans given during the Congress government. Obviously there is no write off, only the column changes. Some of performing assets become non-performing. But you still keep chasing the loan for recovery.

“Write off in the banking parlance, does not mean loan waiver. It just means, that a performing asset has become a non-performing asset. And therefore the opposition must understand the banking terminology before making an irresponsible statement,” he added.

— PTI

Demonetisation LIVE: Situation serious, says Supreme Court, warns of riots

Unnecessary panic spread on demonetisation; no roll back: Arun Jaitley

New Delhi: Digging in his heels, Finance Minister Arun Jaitley on Thursday ruled out the roll-back of the demonetisation decision and slammed Delhi and West Bengal chief ministers accusing them of spreading “unnecessary panic”.

He said the move to demonetise the high value notes was “very well planned”, and added that the rush in bank branches is “significantly” coming down and 22,000 ATMs are getting recalibrated daily in order to dispense Rs 100, and new 500 and 2,000 rupee notes.

Criticising senior Congress leader Ghulam Nabi Azad’s comments in the Rajya Sabha, Jaitley said opposition has developed “cold feet” to debate the issue of demonetisation and criticised Azad for making irresponsible political comment.

Jaitley said he expected every responsible citizen, political party, state governments to support this huge effort because this will mean that India’s formal economy will increase, access to banking will increase, taxation quantum will increase, banks will have far more money to support the economy in terms of trade, interest rates will come down, and therefore the kind of economy it will generate is huge.

“Now unnecessary panic is being spread particularly by some individuals and I didn’t expect Chief Ministers of one or two states to join in this effort,” Jaitley told ANI.

Rejecting the demand of political parties like Aam Admi Party and Trinamool Congress, he said, “whatever AAP and Trinamool Congress said about the roll back, there is no question of that.

It is a clear decision of the Prime Minister and government to cleanse politics and economy of the country. We will stick to it (demonetisation)”. Jaitley questioned the “vested interest” of Congress party in opposing government’s effort to root out black money.

“At the end of the day, this exercise will only succeed in rooting out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this,” he said.

Jaitley also criticised certain comments of Leader of Opposition in the Rajya Sabha and senior Congress Ghulam Nabi Azad during the debate on demonetisation.

He added: “What is the vested interest of Congress party in opposing this campaign to root out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this.”

On why the government was targeting only cash to unearth black money, Jaitley said it was necessary to squeeze cash to prevent generation of more black money.

“You have to squeeze cash because black money generates more black money. Not whatever is in assets is a matter of assessment by the income tax authorities. But whatever is lying in hard cash so that it does not generate anything for the future, has to be squeezed out,” he added.

Jaitley also dismissed the criticism that banks have written off loans belonging to large industrial houses.

“That is completely a false statement. These were loans given during the Congress government. Obviously there is no write off, only the column changes. Some of performing assets become non-performing. But you still keep chasing the loan for recovery.

“Write off in the banking parlance, does not mean loan waiver. It just means, that a performing asset has become a non-performing asset. And therefore the opposition must understand the banking terminology before making an irresponsible statement,” he added.

— PTI

Demonetisation LIVE: Situation serious, Supreme Court tells Centre, warns of riots

Unnecessary panic spread on demonetisation; no roll back: Arun Jaitley

New Delhi: Digging in his heels, Finance Minister Arun Jaitley on Thursday ruled out the roll-back of the demonetisation decision and slammed Delhi and West Bengal chief ministers accusing them of spreading “unnecessary panic”.

He said the move to demonetise the high value notes was “very well planned”, and added that the rush in bank branches is “significantly” coming down and 22,000 ATMs are getting recalibrated daily in order to dispense Rs 100, and new 500 and 2,000 rupee notes.

Criticising senior Congress leader Ghulam Nabi Azad’s comments in the Rajya Sabha, Jaitley said opposition has developed “cold feet” to debate the issue of demonetisation and criticised Azad for making irresponsible political comment.

Jaitley said he expected every responsible citizen, political party, state governments to support this huge effort because this will mean that India’s formal economy will increase, access to banking will increase, taxation quantum will increase, banks will have far more money to support the economy in terms of trade, interest rates will come down, and therefore the kind of economy it will generate is huge.

“Now unnecessary panic is being spread particularly by some individuals and I didn’t expect Chief Ministers of one or two states to join in this effort,” Jaitley told ANI.

Rejecting the demand of political parties like Aam Admi Party and Trinamool Congress, he said, “whatever AAP and Trinamool Congress said about the roll back, there is no question of that.

It is a clear decision of the Prime Minister and government to cleanse politics and economy of the country. We will stick to it (demonetisation)”. Jaitley questioned the “vested interest” of Congress party in opposing government’s effort to root out black money.

“At the end of the day, this exercise will only succeed in rooting out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this,” he said.

Jaitley also criticised certain comments of Leader of Opposition in the Rajya Sabha and senior Congress Ghulam Nabi Azad during the debate on demonetisation.

He added: “What is the vested interest of Congress party in opposing this campaign to root out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this.”

On why the government was targeting only cash to unearth black money, Jaitley said it was necessary to squeeze cash to prevent generation of more black money.

“You have to squeeze cash because black money generates more black money. Not whatever is in assets is a matter of assessment by the income tax authorities. But whatever is lying in hard cash so that it does not generate anything for the future, has to be squeezed out,” he added.

Jaitley also dismissed the criticism that banks have written off loans belonging to large industrial houses.

“That is completely a false statement. These were loans given during the Congress government. Obviously there is no write off, only the column changes. Some of performing assets become non-performing. But you still keep chasing the loan for recovery.

“Write off in the banking parlance, does not mean loan waiver. It just means, that a performing asset has become a non-performing asset. And therefore the opposition must understand the banking terminology before making an irresponsible statement,” he added.

— PTI

Demonetization: No respite from queues on day 10; ATMs grapple with cash shortage

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Chaotic scenes could still be seen at banks and ATMs as people queued up for hours to get valid currency notes to meet their daily expenses, even as the government on Thursday lowered the exchange limit of defunct bills and eased certain restrictions on withdrawal norms.On the 10th day of demonetization, bank branches and cash vending machines are still struggling to manage huge rush. Adding to the woes, most ATMs were either dysfunctional or running out of cash. It is taking people around 1-2 hours to withdraw Rs 2,500, the upper limit set by the government. Bankers are saying it may take another 10-15 days to get all ATMs re-calibrated to dispense high denomination notes of Rs 500/2,000.Mirroring state of affairs in the country, branches and ATMs at seat of power like Parliament House, Finance Ministry and other ministries also have long queues for the withdrawal. However, Finance Minister Arun Jaitley on Thursday said the rush at bank branches has come down significantly and that there is absolutely no panic.
ALSO READ Demonetization Day 9: Banks grapple with huge rush; most ATMs run dryWith the government and RBI struggling to ease cash availability, the small businesses from vegetable vendors to dhabas and small kirana stores that use cash as mode of transaction were the worst hit. People faced inconvenience in purchasing milk, vegetables, medicines as they did not have adequate small currency notes. At various hospitals across the country, patients and their family members are facing inconvenience in buying medicines, food and availing transportation. A bulk of daily labourers were rendered jobless as construction and other activities came to a standstill in the wake of cement, sand and other supplies not coming in. Truckers too were reportedly stranded on highways as drivers ran out of valid currency notes, affecting movement of goods in several parts of the country.To ease inconvenience to the people, government on Thursday allowed withdrawals up to Rs 2.5 lakh for weddings and up to Rs 50,000 for farmers but more than halved the limit of exchange of defunct notes to Rs 2,000.
ALSO READ Demonetization: Vegetable vendors, road-side restaurants feel ripple effectPrime Minister Narendra Modi had on November 8 surprised citizens by announcing demonetization of 500 and 1,000 rupee notes and since then large number of seemingly unending queues before banks and post offices are seen in order to exchange these currencies. Select bank branches across metro cities have already started applying indelible ink on the right hand index finger of people who are exchanging notes.

Parliament paralysed over demonetization; Jaitley refuses rollback

<!– /11440465/Dna_Article_Middle_300x250_BTF –>The Opposition on Thursday paralysed Parliament, with Rajya Sabha disrupted over demand for the presence of Prime Minister Narendra Modi and his response in the demonetization debate, which the government rejected outright.The Upper House witnessed repeated adjournments but Leader of Opposition Ghulam Nabi Azad’s reference to Uri terror attack in the context of demonetization forced the final adjournment for the day.Members of opposition parties, led by Congress, created uproar in both the Rajya Sabha and the Lok Sabha as soon as the Houses met for the day and it continued throughout.The Lok Sabha could carry out business only during the Question Hour, that too amid the uproar, after which it was adjourned for the day minutes past 12 PM.The Rajya Sabha could not transact any business.In the Upper House, which witnessed about six-hour-long debate on demonetization yesterday, Congress and some other opposition parties pressed, from the word go, for the presence of Prime Minister Narendra Modi in the House and a response from him over the hardships caused to people by the November 8 decision to make Rs 500 and Rs 1000 notes invalid.AIADMK members, meanwhile, trooped into the Well and created uproar demanding that Karnataka release Cauvery river water to Tamil Nadu.The uproar forced repeated adjournments of the House, whose proceedings for the day were ended minutes past 3 PM following a major clash between opposition and ruling members after Congress leader Azad made a reference to Uri terror attack.Taking strong objection to this, the ruling side termed the comments as “anti-national” and demanded an apology from Congress besides seeking deletion of the remarks from the official records of the Upper House.Azad, while demanding presence of the Prime Minister and asserting that the House will not be allowed to function till he comes there, said 40 people had died following government’s decision on demonetization.”People are suffering because of demonetization. The death toll has reached 40…..,” he said. He said since the Prime Minister had made the demonetization announcement, he should come to the House.His subsequent controversial comment drew massive protests from BJP members with Information and Broadcasting Minister M Venkaiah Naidu saying the remarks are “anti-national”. “Pakistan will use this statement… I request the Chair, please get it deleted…. The (Congress) party should apologise to the House,” the minister said.Meanwhile, digging in his heels, Finance Minister Arun Jaitley ruled out roll back of the demonetisation decision and slammed Delhi and West Bengal Chief Ministers accusing them of spreading “unnecessary panic”.He said the move to demonetise the high value notes was “very well planned”, and added that the rush in bank branches is “significantly” coming down and 22,000 ATMs are getting recalibrated daily in order to dispense Rs 100, and new 500 and 2,000 rupee notes.Criticising senior Congress leader Ghulam Nabi Azad’s comments in the Rajya Sabha, Jaitley said opposition has developed “cold feet” to debate the issue of demonetisation and criticised Azad for making irresponsible political comment.Jaitley said he expected every responsible citizen, political party, state governments to support this huge effort because this will mean that India’s formal economy will increase, access to banking will increase, taxation quantum will increase, banks will have far more money to support the economy in terms of trade, interest rates will come down, and therefore the kind of economy it will generate is huge.”Now unnecessary panic is being spread particularly by some individuals and I didn’t expect Chief Ministers of one or two states to join in this effort,” Jaitley told ANI.Rejecting the demand of political parties like Aam Admi Party and Trinamool Congress, he said, “whatever AAP and Trinamool Congress said about the roll back, there is no question of that. It is a clear decision of the Prime Minister and government to cleanse politics and economy of the country.We will stick to it (demonetisation)”.Jaitley questioned the “vested interest” of Congress party in opposing government’s effort to root out black money.”At the end of the day, this exercise will only succeed in rooting out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this,” he said. “The whole thing is a very well planned and executed exercise. Obviously in the first two-three days there was a lot of rush, last three days I have been going everyday myself to look at bank branches and I can say with full confidence that the rush has significantly come down… and today it has come down substantially,” he said.Jaitley said 22,000 ATMs are being recalibrated in a day on war footing and in next few days all would be dispensing money. “RBI has provided more than adequate currency to the currency chest, there is absolutely no shortage”.He said the earlier currency exchange limit of Rs 4,500 was being “misused”. Following complaints that people are being hired to convert money and that is responsible for big queue, the government decided to start using indelible ink and reduced the limit of currency exchange to Rs 2,000 per person till December 30.”For me, there is a great regret that some people have been inconvenienced, which was bound to take place in an operation of this kind because the larger object in the interest of country that we have to squeeze the quantum of currency, we have to withdraw the quantum of currency which was used in generation of black money, counterfeit. And we had to allow normal volume of currency in the market…,” he said.He said most Chief Ministers across the country have not only supported this but they have in a big manner used the apparatus of state government to support this entire move.On why the government was targeting only cash to unearth black money, Jaitley said it was necessary to squeeze cash to prevent generation of more black money.”You have to squeeze cash because black money generates more black money. Not whatever is in assets is a matter of assessment by the income tax authorities. But whatever is lying in hard cash so that it does not generate anything for the future, has to be squeezed out,” he added.Jaitley also dismissed the criticism that banks have written off loans belonging to large industrial houses.”Write off in the banking parlance, does not mean loan waiver. It just means, that a performing asset has become a non-performing asset. And therefore the opposition must understand the banking terminology before making an irresponsible statement,” he added.

Jaitley rules out rolling back demonetization, condemns Azad for Uri comparison

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Unfazed by combined opposition attack on Prime Minister Narendra Modi in and outside Parliament, Finance Minister Arun Jaitley on Thursday ruled out roll back of demonetization saying the government is firm on cleansing politics and economy of the country.Rejecting the demand of political parties like Aam Admi Party and Trinamool Congress, he said, “whatever AAP and Trinamool Congress said about the roll back, there is no question of that. It is a clear decision of the Prime Minister and government to cleanse politics and economy of the country. We will stick to it (demonetization)”. Delhi Chief Minister Arvind Kejriwal along with West Bengal Chief Minister Mamata Banerjee on Thursday organised a protest in front of RBI office in the national capital to oppose the decision of the government to withdraw Rs 500 and Rs 1,000 currency notes. They demanded a withdrawal of demonetization asthey believed that it is causing hardship to common man.The issue of demonetization also rocked Parliament leading to repeated adjournments of the Rajya Sabha as well as the Lok Sabha. On opposition’s demand for a reply by Modi on the issue of demonetization in the Parliament, Jaitley said: “Government has a collective responsibility. And therefore it is the prerogative of the government on who should reply to a debate. Bulk of the debate has already taken place. I have attended the debate. And the government will decide who will reply to the debate. If the government thinks it is necessary at appropriate time for the Prime Minister to intervene, we will consider it at that stage. But it is not necessary that there is an intervention (by Prime Minister) in every debate,” said Jaitley.He also criticised the statement of Leader of Opposition in the Rajya Sabha and senior Congress Ghulam Nabi Azad who said more people died standing in queues of banks than in terrorist attack at Uri. Regretting Azad’s remarks, the minister said comparing demonetization problems with Pakistan-sponsored terrorism at Uri is “certainly not a responsible political comment”. He added: “What is the vested interest of Congress party in opposing this campaign to root out black money, crime money and make the Indian economy cleaner. Congress as a national party must support this.”Participating in the discussion on demonetization in the Rajya Sabha, Azad said: “People are suffering because of demonetization. The death toll has reached 40. In the attack by Pakistani terrorists (on army camp) in Uri (in Kashmir), even half of the deaths did not take place. People double than that figure have died due to wrong policy of the government.” On why the government was targeting only cash to unearth black money, Jaitley said it was necessary to squeeze cash to prevent generation of more black money.”You have to squeeze cash because black money generates more black money. Not whatever is in assets is a matter of assessment by the income tax authorities. But whatever is lying in hard cash so that it does not generate anything for the future, has to be squeezed out,” he added. Jaitley also dismissed the criticism that banks have written off loans belonging to large industrial houses. “That is completely a false statement. These were loans given during the Congress government. Obviously there is no write off, only the column changes. Some of performing assets become non-performing. But you still keep chasing the loan for recovery.””Write off in the banking parlance, does not mean loan waiver. It just means, that a performing asset has become a non-performing asset. And therefore the opposition must understand the banking terminology before making an irresponsible statement,” he added.

Jaitley ‘misled’ Parliament, NPAs are big scam: Yechury

<!– /11440465/Dna_Article_Middle_300x250_BTF –>CPI(M) on Thursday took on Finance Minister Arun Jaitley alleging he “misled” the Parliament and whole country on FCRA and NPAs and accused the government of practising “crony capitalism”.CPI(M) General Secretary Sitaram Yechury said the party will also move a resolution for constitution of JPC on demonetisation crisis as “prior information was with some people” before the announcement made by Prime Minister Narendra Modi on November 8. Describing the NPAs as “big scam”, he said “It has risen two times in the last two years and conviction of wilful defaulters have come down. The government is involved in crony capitalism.”Referring to yesterday’s reply of Jaitley in the House, Yechury said “What Finance Minister said on NPAs was wrong. Finance Minister said that writing off debt is not writing off the loan as it still remains in the book and banks can make attempts to recover it.” He quoted “RBI guidelines” to prove Jaitley’s observation on NPAs wrong and said there is a clear RBI guidelines on performing assets becoming NPAs. Since there will be no incentives the banks will not go after loan recovery after writing off debts, Yechury said.
ALSO READ DNA Exclusive: SBI writes off loans of 63 wilful defaultersYesterday, the CPI(M) leader said in the Rajya Sabha that SBI waived off Rs 7000 crore from their Non-Performing Assets (NPAs), of loans which are not being returned. Intervening, Jaitley had said, “Written off does not mean waiver…. It does not mean that the loan ceases to be a loan. We will still chase the loan, the entry in the book changes that is from being performing assets, it become a non-performing.”Attacking the government, Yechury said “In the last two years Rs 1,12,078 cr debt has been written off and they are saying they will still recover and pursue it.” He said the CPI(M) will move a resolution when the time will come for JPC. On FCRA, he said “It was amended through Finance Bill in the 2016 budget which was wrong. Finance Minister misled Parliament and the whole country.” CPM leader Mohd Salim said,”There was a selective leak of demonetisation move and prior information was available with some people.This is a serious charge and we want formation of JPC to go into this,”

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