Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Thursday, 14 July 2016

Well Begun is Half Done !

In respect of curbing the Black Money , following report appeared in Hindustan Times ( July 15, 2016 ) :

SIT on black money has recommended :

*  Banning of Cash transactions of over Rs 3 lakh

*  Individuals restricted from holding more than Rs 15 lakh in cash

*  Enactment of an Act to declare such transactions illegal / punishable under law

Revenue Secretary , Shri Hasmukh Adhia added :

*  Legislative changes required for both suggestions to be implemented

*  Limiting cash transactions would strengthen archaic laws and improve enforcement action

*  SIT recommendation is to limit cash movement

*  We are waiting for public comments before we take a view on implementing these suggestions

*  SIT had taken into account big cash recoveries made by law enforcement agencies from time to time and
    concluded that the cash transaction limit would succeed if there was a similar cap on Cash holdings

Congratulations on a good beginning  !

I am sure , citizens will have some questions about these proposals, such as :

*  Will the Cash-Holding limit also apply to Companies ( partnership / private ltd / public ltd ) ?

   Especially those Companies which pay out monthly salaries in cash to employees on 7th of each month ?

*  Will this limit also apply to NGOs / Political Parties / Charitable Trusts / Hospitals / Govt Agencies etc ?

    In such cases , who ( which person - CEO / CFO / MD / Trustee / Party President / Secretary ) is responsible ?

*  Will separate limits be applied to ( A ) Cash in bank lockers  , and ( B ) Cash in home lockers  ?

*  What powers will the Income Tax Authorities have to raid / inspect  , " suspected " lockers , especially the
    bank lockers ? Would they need to obtain a prior warrant ? from which Authority ? Can these lockers be opened
    even in the absence of the concerned owner ?

*  What amount of punishments are envisaged for those found guilty of paying and receiving ?

*  Will enforcement of these proposal require an army of 1 MILLION inspectors , considering that there are over 50
    million individual tax payers , apart from 40 million MSME establishments in the country ?


#   Whereas this is definitely a step in the right direction , it must be thought through very thoroughly so that
      ordinary / innocent citizens are not harassed on mere " Suspicion " of holding more than Rs 15 lakh in cash .

 #  The raiding / inspecting agency MUST have some IRREFUTABLE PROOF that a particular cabinet / locker / safe ,
      contains ( beyond an iota of doubt ) , an accumulation of currency notes exceeding Rs 15 lakh , continuously
      for a period of 7 days in a row ( - and further proof that this ILLEGAL amount consists of the SAME currency
      notes and not different combinations of currency notes , over that 7 day period )

 #  Any number of shops / establishments , which accept payments of under Rs 3 lakhs in cash from dozens of
     customers in the course of a working day , may have , even Rs 20 lakhs in cash at the end of the day !

     It is a normal practice for all shop owners to take the cash home at the end of the day and deposit it in their
     bank account , the next morning

     There must not be any harassment of such shop-owners by the concerned Authorities

#   The only way these proposals can be implemented SMOOTHLY and in a FOOLPROOF way , is to implement my
      following old suggestion ( sent to Policy Makers , many times in past one year ) :

     *  Discontinue paper-based currency notes of Rs 500 and Rs 1,000
     *  Introduce plastic currency notes of Rs 500 / 1,000 which are embedded with RFID sensors

    *  Assign to each such note, a IP V 6.0 address , linked to its unique note number

    *  Set up a IT-enabled Technology Platform which will constantly monitor any accumulation of Rs 500 / 1000
        RFID embedded notes in excess of Rs 15 Lakh within an area of ONE square meter

Not only this IT-enabled Technology Platform show up all cabinets / lockers having such accumulations ( on the

GPS maps of IT Department's mobile app - BLACK-MAIL ) but it will also provide irrefutable proof of violation

And , a frugal extension of this technology will even create a dynamic CURRENCY MAP of entire country by tracking

the movement of each and every currency note ( Rs 500 / 1000 ) , throughout its life !

And the CURRENCY DENSITY of any State / City / Street  !

No need for an army of inspectors , additional administrative machinery , search-warrants , " Panch-Nama "  !

No chance of frivolous litigations on part of the so-called " Aggrieved " !

I do hope , our policy makers will cease this opportunity of a life time ( especially in view of forthcoming elections )


15  July  2016

www.hemenparekh.in / blogs