Post demonetisation of 500
and 1000 notes is announced there are lots of problems at the ground which
needs be addressed at earliest. The cash
is not available to genuine people for day to day transactions. The exchange limit is also reduced. ATMs are
empty. There are long queues at the banks and bank staffs are also working
under lots of pressure. There are serious issues where there is medical
emergency and where there are marriages in the family. In light of this
Government should also look at the ground realities and do following things
immediately to reduce the panic and help common people to solve their problems.
1)
Stop exchange of notes:
It is already 12 days
have passed and now the exchange of old notes should be stopped at earliest as
some elements have misused this option in early 4-5 days which has created more
problems. I think now the common people might have got the cash to run the
house for next 8-10 days. Even limit of Rs. 2,000 does not serve the purpose.
This will reduce pressure from the banking staff to regularize the banking
system at earliest. I must say that banking staff has done a great job since 9th
November under great pressure and have sacrificed their personal life for the
benefit of common man.
2)
Ease cash transaction in ATMs:
First of all give
direction to RBI and Banks to see that all ATMs are working and have enough
cash available. Even in city like Mumbai ATMs are closed since last many days.
The bank people say that they don’t have smaller denomination notes to run the
ATMs. RBI should ensure that 100 and 500 notes are available to banks to ease
the pressure. Even the daily limit of Rs. 2,500 is very low and as the same
person will come again and again at ATM to transact. But if the limit is increase or been kept per
week then this can help people to withdraw more and reduce the queues.
3) Reduce the demonetization period:
I am strongly of the
opinion that 50 days window is too long and things will not change unless the
period is over. I think the period should be reduced by at least 15 days so
that life becomes normal. I also understand that the Government will not ease
the cash limit unless the window is over as there are chances that many people
will take undue advantage if the cash limit is eased before the window is
closed. So it is important to close the window at earliest.
4)
Penalise vendors for not accepting cheque’s:
There are reports in
the media that vendors are not accepting the cheque’s. Not accepting any legal
banking instrument should be made punishable and RBI should intervene immediately
and issue a notification in this regard. Police should also take action against
all those who are not accepting cheque’s.
5)
Introduce 45% tax option immediately:
Last but not the least
Government should announce the 45% tax option immediately to reduce the legal
battle. There are many stories running in the social media about the cash
deposit and the consequences of the same on tax liability. Even tax
professionals are advising differently on the same. Few believe that 200%
penalty is attracted but few also advise that only 30% tax is payable. To end
the confusion and reduce the legal battle I think that Government should take
the middle path of levying 45% tax as given in the Income Disclosure Scheme.
It is important to end
the confusion at the ground at the earliest and Government needs to take
proactive measured instead waiting till end of the window. It is not a good
idea to punish 10% of the people having black money other 90% of the common people
suffer. I hope the Government will
consider these options to reduce the tension across India.
This article first appeared at indianotes.com
http://www.indianotes.com/Analysis/5-steps-Government-should-take-immediately/204964/2/T
