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Swarna Bharat Party says, Demonetisation has been Implemented Badly and will do Nothing to Address the Causes of Corruption and Black Money

Swarna Bharat Party says that demonetisation has been implemented badly and will do nothing to address the causes of corruption and black money

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Indian currency notes. Pixabay

November 13, 2016: As the undying debate of whether demonetisation will at all be of any good to the country continues, Swarna Bharat Party(SBP) puts forward their point of view.

Swarna Bharat Party, which repeatedly talks about freedom and opportunity in India, despise  injustice, crime, corruption and wants to defend the liberties of the people of India says that demonetisation has been implemented badly and will do nothing to address the causes of corruption and black money.

Mr Sanjay Sonawani, President of Swarna Bharat Party, India’s only liberal party, said that demonetisation can at best play a minor supportive role in the systemic reform of the governance system to attack black money and counterfeiting. Implementing demonetisation without associated system-wide reforms is at best a band-aid, at worst a signal that the Modi government has no understanding of the causes of black money.

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So long as an incentive to trade exists, a range of mechanisms can be used to exchange value. Black money is a trade (including corruption) that is not declared to government. If cash is made harder to use, that means other means will be used. Money is fungible. This means a wide range of assets ranging from furniture, laptops, cars, scooters cars, to gold, real estate, shell companies, Bitcoin, foreign currency and assets can be used to complete an undeclared trade.

Even if the economy becomes 100 per cent cashless, there will be no major change to black money and corruption till the underlying causes are addressed. The way to extinguish black money is to extinguish the incentives for undeclared trades. That requires a deep understanding of the governance system.

Additionally, of course, a huge deadweight loss has been imposed on India by the manner in which demonetisation has been rolled out. People who wait in long lines to exchange currency are producing nothing with their time. Apart from this, the personal plans of millions of people have been disrupted, causing additional costs.

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Logistically, the design of the scheme is a nightmare. Cash has run out repeatedly in banks. Hardly 20 per cent of the ATMs are working in some cities. Many ATMs have not been reconfigured to dispense Rs. 100 notes. Many people are receiving only Rs. 2000 denominations from banks, which is useless for there is no change available.

Moreover, it is unclear to what extent some of the poor are losing a part of their lifetime savings because of lack of access to financial institutions, thereby being forced to sell their savings at a discount. The scheme seems to have been implemented without due diligence to logistics. SBP also understands that the truck industry is suffering badly, potentially creating a risk to the supply of essential commodities.

The objective of reducing counterfeit money will probably be achieved, but it is unclear whether sudden demonetisation was the most efficient way to do this. The greatest problem with this policy, Mr Sonawani said, is that the people are being made to believe that demonetisation will destroy black money and root out corruption. It will do nothing of that sort.

Black money and corruption are symptoms of our system. Unless we repair the system, nothing will change; black money will return with a vengeance. So long as our politicians are necessarily corrupt due to our electoral system, and bureaucrats are necessarily unaccountable (and often corrupt) – as detailed in SBP’s manifesto – black money cannot be rooted out.

Mr Sonawani wondered aloud whether this action is intended to divert attention from the Government’s chronic failures in number of areas, including its unfulfilled promise to bring back black money from abroad, the festering Kashmir problem, and total failure of Swachh Bharat and Nirmal Ganga Sahbhagita.

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Mr Sonawani hoped that Mr Modi will soon roll out real reforms, instead of engaging in further theatrics.

Should that happen, SBP will be the first to applaud him. The government should immediately start implementing the reforms of the electoral system and bureaucracy listed in SBP’s manifesto.

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Income Tax Officers Announce 17-point Checklist to Track Unaccounted Cash During Demonetisation

I-T Dept issues 17-point checklist to trace unaccounted DeMO cash

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Examination will take place of cash deposits from period April 2015 to November 8, 2016. Pixabay

In a bid to seize illegal cash, the Income Tax Department has issued a 17-point checklist to tax commissioners across the country to track those who deposited unaccounted cash during demonetisation.

In a directive to the Principal Chief Commissioners of Income Tax and Principal Director Generals of Income Tax, the Central Board of Direct Taxes (CBDT) said that in continuation of the handling of cases related to demonetisation, a verification checklist of cash deposits has been prepared to assist the assessing officers so that deviant cases can be taken up for further study.

The CBDT move is aimed at spreading the department’s net wide and deep to catch those who deposited unaccounted cash during demonetisation.

In this latest directive to tax officers, a 17-point checklist has been created, which has to be updated on the department’s server for further action. All unaccounted cash deposits made between November 9, 2016, and December 31, 2016, will be examined as part of this plan.

The checklist also says that if a taxpayer disputes the amount, the correct amount has to be mentioned after checking with the bank.

The particulars in the checklist are — return filing compliance, the total income of the taxpayer in 2016-17, gross total income (including exempt income) of the taxpayer in FY 2016-17 and percentage of cash deposit to gross total income (including exempt income).

IT Officers
This move is aimed to catch those who deposited unaccounted cash during demonetisation. Pixabay

The assessing officers will have to check on the checklist with regard to the nature of deposit on assessment of the explanation provided by the taxpayer and the quantum of unaccounted deposits as determined by the assessing officers.

On the response side, they have to file if the explanation was acceptable, partially acceptable or not acceptable. The nature of the deposit option could be sale or advance for sale of land or any other capital asset, gift, repayment of loan and cash in hand.

Some other verification checkpoints are whether the quarterly VAT return is revised in the post-demonetisation period, if small part of the cash is deposited in or withdrawn from the bank despite having huge cash in hand, if there are large changes in the purchase and sales figures between the original and the revised VAT returns and if the changes are for genuine reasons.

The assessment procedures as per the checklist are — if the books of the accounts have been rejected, if additions have been made u/s 68 to 69D and if tax is calculated as per section 115BBE and if penalty u/s 271AAC has been levied.

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On November 8, 2016, the Government of India had announced demonetisation of all Rs 500 and Rs 1,000 banknotes. Pixabay

The examination of monthly cash sales and cash deposits lists the period from April 2015 to November 8, 2016.

Also Read: Gold Price May Increase to Rs 40,000 per 10 Gram by Diwali

On November 8, 2016, the Government of India had announced demonetisation of all Rs 500 and Rs 1,000 banknotes. It also announced the issuance of new Rs 500 and Rs 2,000 banknotes. (IANS)