This is a great step for curbing black money acquired legally but tax not paid) and dirty money (acquired through illegal source) in India. The move is so unexpected that people have no time at all to remove their black money and now this would become simply a waste of paper for them.
I can't imagine any better move than this to eliminate black money from the country. However, its immediate impact is likely to be very adverse on the stock market and the sectors like real estate where lot of black money is used. Its impact on the other sectors would be as following.
The sale of gold and diamond jewelry would drastically decline. This means less foreign currency outgo and hence better balance of payment situation.
- Corruption would be reduced drastically.
- Credit card and other legal transactions would go up.
- Taxes (Income Tax, Excise, Service tax and Sales Tax) would go up substantially since more transaction would be in white.
- Criminal activities would reduce.
- Use of illegal money in election would be reduced drastically.
- Property rates would reduce drastically.
There would, however, be a lot of chaos in first few days.Then everything would fall in its place.
The old unit of currency must be retired and replaced with a new currency unit.
What is the meaning of Demonetization?
Demonetization is the act of stripping a
currency unit of its status as legal tender. Demonetization is
necessary whenever there is a change of national currency.
Importance Of This Decision:
Government will track every single penny which is present in the form of Black Money in India.
Rising graph of Fake Currency will drop soon & from next time no one will check your 500 Rs. note.
This decision will help us to tackle against corruption as government will always have its eye on your transaction and money.
Political Views about Rs. 2000 Note
Former Finance Minister P. Chidambaram said "Introduction of Rs 2000 note is a puzzle."
Yog Guru Baba Ramdev Said "मैं बड़े नोटों का विरोध की बात पर अब भी कायम हूं। मेरे हिसाब से 2000 रुपये का नोट चलाने से काला धन इकट्ठा करने वालों को और सहूलियत हो जाएगी। ऐसे में इस मुहिम का कोई मतलब नहीं रह जाएगा।"
Conclusion
PM Modi's intention is very clear about curbing the black money and he has comprehensive blue print to redefine the Indian economy.
I would like to draw your all attention upon his past decisions which played a pivotal role in revamping Indian economy.
- Firstly they asked for all the bank account number in your Return of Income.
- Then they linked your PAN with Aadhar
- They linked all the subsidies, pension and other benefits directly to your bank account through Direct Benefit Transfer Scheme.
- Then they gave opportunity to all the common men to open an account with bank through Jan Dhan Yojna.
- They entered into revised treaty with most of the countries in which unaccounted money goes through HAWALA e.g. Mauritius and thus the route of Black Money coming from Mauritius which everyone knew is stopped.
- They passed few strict laws to overcome the evil of black money such as Benami Transaction Act and Foreign Black Money Act.
- They levied Excise duty on Gold.
- They also made TCS compulsory for Cash transactions above 2 lakhs.
- They withdrew lakhs of pending income tax and service tax litigations where Common men had won at Appeal level and Department had gone further.
- They also entered into information exchange agreement with such countries.
- Then they gave last opportunity to all black money hoarders through Income Declaration Scheme, 2016.
Now they have a Scheme for Dispute Resolution Panel again to reduce Litigation till December 2016.
Now the masterstroke, that they have banned Rs. 500 & Rs. 1000 denominations.
Not only the destination of this whole process is commendable but even the journey or the chronology of these events is interesting which explains the ultimate destination and who knows , may be the journey is still not over and the ultimate destination may still be the Swiss Account holders!!
Presented By
Diwakar Agrawal
Legal consultant
Mob.: 9911746549
