Buoyed by the Prime Minister Narendra Modi’s surprise move to demagnetise Rs 500 and Rs 1,000 denomination currency notes, Justice M.B.
Buoyed by the Prime Minister Narendra Modi’s surprise move to demagnetise Rs 500 and Rs 1,000 denomination currency notes, Justice M.B. Shah (Retd), head of the special investigation team on black money, has said that the next step of the government should be to limit cash holdings by private individuals to Rs 10-15 lakh.
“With Rs 500 and Rs 1,000 notes being banned, a step that will make India’s fight against black money fool-proof is to make private cash holding by individuals beyond Rs 10-15 lakh a serious offence. This is something that we have already recommended,” Shah told this newspaper.
“This will also override concerns that even Rs 2,000 note that is in the offing will lend itself to forgery”.
Asked about the impact of the latest move on currency notes, the chief of the black money panel said: “There is no doubt that there will be a huge positive impact in the short-term. But for the long-term implications, we will have to adopt a wait-and-watch policy as people have a tendency to avoid paying taxes”.
With moves already afoot to frame a proposal to cap the amount of cash or currency an individual can hold, the threshold amount is yet to be worked out, informed sources pointed out. The government has been consciously following a policy of encouraging use of plastic money rather than cash dealings.
Last year in April, finance minister Arun Jaitley had posted on his Facebook page titled ‘The NDA Government’s campaign against black money’ where he had said: “The bulk of black money is still within India. We thus need a change in national attitude where plastic currency becomes the norm and cash an exception.”
Mr Jaitley had asserted that the use of banking transactions and plastic money will rise significantly with the opening of a large number of payment gateways, Internet banking, payment banks and the emerging reality of e-commerce.
The SIT headed by two retired Supreme Court judges — Shah and Arijit Pasayat — comprises the heads of 11 premier investigative, enforcement and intelligence agencies.
After sweeping to powers in 2014, the first major decision of the BJP-led NDA government was to set up the SIT on black money.
The quantum of black money inside the country is still a matter of intense speculation. A government-sanctioned study that engaged three institutes—the National Institute of Public Finance and Policy (NIPFP), National Institute of Financial Management (NIFM) and the National Council of Applied Economic Research (NCAER)—has not yielded a satisfactory estimate with the figures submitted by the three organisations varying wildly.