With reference to "The war on cash" (September 9), Manish Sabharwal believes that less frequent use of cash, and that too for small transactions, will have a positive impact on corruption by public officials, financing of terrorism, human trafficking, money laundering, etc. Simultaneously, he wants the government to accept the Supreme Court-monitored SIT recommendation to cash holdings (Rs 5 lakh) and cap on cash transactions (Rs 3 lakh).
In fact, now with the government claiming several crores of people have opened bank accounts under Jan Dhan Yojana, it is high time that the Modi government demonetised Rs 500 and Rs 1,000 currency notes and amended the Income Tax Act to disallow any cash transaction above Rs 5,000 (against Rs 20,000 presently) and bring everybody under the banking net.
It is high time to go for demonetising the higher denomination currency in view of the Income Declaration Scheme closing by this month end. If the government really wants this scheme to be successful, it should start sending the feelers through informal channels and take the actual step at the appropriate time. To flush out the cash floating in the real estate and infrastructure sectors, it will prove to be the golden opportunity, simultaneously taking care of non-performing assets in banking.
Howsoever confident Prime Minister Modi may be to take action against people not coming under the disclosure net, the fact remains that it may flop like an earlier scheme to bring back unaccounted money stashed abroad. This is the last chance for Narendra Modi to do some surgical operation to escape being mocked at over retrieving black money.
Naresh Saxena, New Delhi
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