India will be cashless in 6 months

New Delhi: Arthakranti Pratishthan, a think tank which apparently is the brain behind Prime Minister Narendra Modi government’s demonetisation scheme, on Thursday said within six months to one year India would be ready to be cashless and then Rs 2,000 and Rs 500 notes could possibly be withdrawn forever.

Speaking to this newspaper, Amod Phalke, a member of the think tank, said the demonetisation  move has paved the way for the next stage in its plan — introducing banking transaction tax in the country.

As per Arthakranti Pratishthan, after demonetisation of high value notes, all taxes in India —income-tax, VAT, excise duty and even the proposed GST — would be abolished. All these taxes will be replaced by a 1-2 per cent banking transaction tax.

Tax on banking likely to rake in Rs 21 lakh crore
Under banking transaction tax (BTT), people will have to pay 1-2 per cent tax on the amount credited or deposited in their bank accounts. This deducted amount will be distributed among Central, state and local bodies.

Since nearly all transactions will be cashless, the Pratishthan believes that BTT will raise Rs 21 lakh crore taxes which is equivalent to all the taxes raised by Centre and states together.

In its latest issue the RSS mouthpiece, Organiser credited the think tank for being “instrumental in the surgical strike against black money in the country on November 8 in the form of demonetisation  of Rs 500 and Rs 1000 notes.”

Mr Phalke claimed that they have been meeting Mr Modi since 2013 with its proposals when  he was chief minister of Gujarat.

Mr Phalke said that as the Indian economy is highly dependent on currency, so Mr Modi could not at once withdraw all high value currency. “But Mr Modi in his speech has clearly mentioned that Rs 2,000 notes will be regulated. As after people start looking at cashless ways to pay, Rs 2,000 currency could be easily withdrawn,” he said.

Arthakranti Pratishthan Rs 50 and Rs 100 notes will be kept for poor and rural people till they also move to cash less economy. “If you will see other economy like the US or other places people don’t keep such a large amount with them. But in India due to high denomination notes people have been out of banking system,” said Mr Phalke.  

However, he said that in its plan they didn’t want people who deposit money even Rs 100 crore in banks to be penalise. “The earlier taxation system was defective. So these people should not be penalise for depositing huge sum of money. The government may be take 10 per cent as tax and rest pay them in 15 years bonds or like,” he said.

Mr Phalke said that it was a matter of time when their proposals will be implemented. “It will be implemented either in 2017- 2018 or 2019 is only matter of time. People have realised the power of our plan,” he added.