The government’s decision to ban Rs 1,000 and Rs 500 was taken so as to reduce terror financing and black money, but those taxpayers who are honest were hit the hardest, a Parliamentary panel report has said. The panel had tabled the report in the Rajya Sabha yesterday.
As per moneycontrol.com, the panel also said in its report that rural households and those with low income had hit the hardest after the Narendra Modi Government introduced the step. In its report the panel also said that the government’s initiative on demonetisation not only affected the poor but also manufacturing industry as well.
“It was an effort to combat corruption, tax evasion and counterfeiting and eradicate black money. However, the committee realises that inevitably, it is the low-income and rural households who have been the hardest hit by the currency reform. Demonetisation has weighed heavily on the country’s manufacturing sector. Though the ministry took steps to mitigate the effects, it cannot be ignored that it created significant disruption throughout the economy and threatened economic output,” says the report of the committee on subordinate legislation of Rajya Sabha.
The Centre had then said that the then Rs 1,000 and Rs 500 would be discontinued as legal tender. At the time, the Narendra Modi Government had also announced to take India towards cashless economy. It had come out with as many as 74 notifications in first 50 days since the demonetisation announcement was made on November 8 last year.
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“The committee acknowledges that corruption is a problem but in the process honest, hardworking and tax paying citizens of India were made to suffer. The committee agrees that corruption is a major cause for the persistence of poverty and the growth of corruption in India due to the maze of regulations and the thickets of red tapism. In the committee’s view solution lies in simplification, rationalisation and reduction in taxes… And for efficient implementation of all this, discussion on the issues at hand with people with the requisite expertise is a must rather than attack any criticism as somehow anti-national or pro-corruption,” says the report further.