Go after
big fish, spare small fry (ET)
The tax department will reportedly probe deposits
under Rs 2.5 lakh if there is evidence of wrongdoing by people after
demonetisation.
Going after lakhs of Jan Dhan account holders would be
a waste of the tax department’s scanty resources and, further, politically
counterproductive.
The point should be to deploy the full firepower of
Big Data analytics to figure out who the tax-evading big fish are and who could
be utilising the services of those with abnormally bounteous Jan Dhan accounts.
State
funding of elections can take place in stages, with electoral reforms (HT)
Prime Minister Narendra Modi’s advocacy of State
funding of elections, though laudable, is an idea that can be worked upon only
in stages.
Election Commission has said that State funding cannot
be fully successful without electoral reforms and politics being
decriminalised.
The State funding of elections can be compared to
buying a house, in whose case it is difficult to say how much more has been
paid over and above what has been stated in the registration papers.
Suggested Reforms
* Legislation should be made to regulate the
functioning of political parties, including their registration and
de-registration.
* Parties must get their accounts audited and they
must be there for the public to see.
* 255th Law Commission Report: Political
parties failing to hold internal elections should be de-registered.
* Election Commission may be empowered to rescind
elections if there is evidence that voters have been bribed
* To curb the use of money power during elections is
to reduce the period of campaigning in Lok Sabha and assembly elections.
Novel Idea: There
can be an informal referendum by civil society and advocacy groups to press for
electoral reforms, which the political class may find difficult to ignore.
Making
India a cashless economy (Mint)
According to a 2014 study by Tufts University, The
Cost Of Cash In India, cash operations cost the Reserve Bank of India (RBI) and
commercial banks about Rs21,000 crore annually.
A shift away from cash will make it more difficult for
tax evaders to hide their income, a substantial benefit in a country that is
fiscally constrained.
Steps being taken to promote a cashless economy:
* Opening bank accounts for the unbanked under and the
adoption of direct benefit transfer.
* RBI has also issued licences to open new-age small
finance banks and payments banks
* The recently launched Unified Payments Interface by
National Payments Corporation of India makes digital transactions as simple as
sending a text message.
* The exercise to exchange currency notes and the
ongoing currency crunch be a decisive factor in making India a truly cashless
economy.
* A meaningful transition to cashless economy will
depend on a number of things such as awareness, technological developments and
government intervention. For instance, mobile wallets have seen notable
traction, and it is possible that a large number of Indians will move straight
from cash to mobile wallets.
Challenges in Going Cashless
* Large Unbanked Population: According to a 2015
report by PricewaterhouseCoopers, India’s unbanked population was at 233
million.
* Inadequate ePOS: the ability to use their debit or
credit card is limited because there are only about 1.46 million points of sale
which accept payments through cards.
* About 90% of the workforce, which produces nearly half
of the output in the country, works in the unorganized sector. It will not be
easy for the informal sector to become cashless
* There is a general preference for cash transactions
in India. Merchants prefer not to keep records in order to avoid paying taxes
and buyers find cash payments more convenient.
Way Ahead
* Make bandwidth available for transactions: The
availability and quality of telecom network will play an important role.
Presently, people face difficulties in making electronic payments even in metro
cities because of poor network.
* Banks and Service Providers need to invest: As one
of the biggest beneficiaries of this transition, banks and related service
providers will have to constantly invest in technology in order to improve
security and ease of transaction.
* Government Efforts: It will have to find ways to
incentivize cashless transactions and discourage cash payments. Implementation
of the goods and services tax, for example, should encourage businesses to go
cashless.
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