Making the most of demonetisation
Making the most of demonetisation: The current steps are welcome, but for black money to shrink in the long term supportive reform steps are called for...
Go ahead signal
C Rangarajan’s article “Making the most of demonetization” (The Hindu Business Line, November 16) must give a lot of comfort to those who initiated action for ‘Demonetization’ and the thousands who are working 24X7 for implementing it as efficiently as possible with minimum pain for the common man, as the ‘Go ahead’ signal comes from an informed and unbiased veteran who has the backing of an entire life’s experience in practical central banking with post-retirement association with policy making at the highest level in government.
Former RBI Governor has endorsed the three objectives of targeting black money in the form of currency, funding of terrorism through cash and making fake currency which found mention in PM’s November 8, 2016 speech announcing demonetization, suggesting positive measures to achieve these objectives.
Taking the advice seriously, policy makers need to quicken the measures to prevent further accumulation of black money and to flush out the huge quantities of unaccounted wealth concealed in sectors like gold and jewelry, real estate and accounts abroad, leaving the burden of minimizing the pains caused mainly by planning and logistic problems to executives down the line with guidance from Reserve Bank of India.
The two steps suggested by Rangarajan in this context relating to keeping the tax rates at moderate levels and Electoral Reforms (though not specifically mentioned, government funding of electoral expenses based on need-the rich who fight election should not get this facility- is an immediate priority area) are significant and can go to the drawing board simultaneously with the preparation of Budget 2017-18.
M G Warrier, Mumbai