Prime Minister Narendra Modi increased tax base by way of implementing demonetisation and now has influenced CAG to not audit the loss to public exchequer and the pain and agony caused to the countrymen due to his faulty and inept decision.
The sudden U-turn by the Comptroller and Auditor General of India on the effect of demonetisation appears to have been influenced by the Modi government that seeks to escape the blame for their inept handling of financial matters.
Earlier, during the days of Congress rule, CAG had emphatically calculated the presumptive loss suffered in the allotment of telecom licences that led to the loss of UPA’s credibility and the fall of Manmohan Singh government.
CAG Shashi Kant Sharma had told in the month of March 2017 that “Demonetisation per se is a banking and money supply issue and as such, outside the CAG’s audit jurisdiction. But the CAG is well within its rights to seek audit of fiscal impact of demonetisation, largely its impact on tax revenues. That way the issue gets linked with the public exchequer.”
He pointed out that there are other linkages of demonetisation with the public exchequer that will also be covered by the audit. This would be “expenditure on printing of notes, RBI dividend to the Consolidated Fund, etc.” the CAG said.
Aware of the cumulative loss now occurred due to his faulty decision of demonetisation followed by another disastrous GST that necessitated capitalization of banks thus turning topsy- turvy the economy of the country, Prime Minister Narendra Modi have told CAG that he cannot audit the losses of such reforms as these are the policy decisions of his government.
The immediate affect of the sudden withdrawal of the high valve currency notes was on lakhs of urban and rural labourers and migrant workers as employers had no cash to pay their wages. Therefore, the joblessness that started with demonetisation and has increased to such an extent that people are committing suicides and crime graph has also increased steeply.
PM Modi’s inept handling seriously damaged the country’s economy resulting into rendering the people penniless with economy grinding to a stand still for one year unheard of in any other country. Modi even changed his narratives and rules more than 100 times after banning the currency that resulted in adding further chaos.Over 100 lives were lost as people were compelled to stand in queues outside the banks for want of cash. Banks were directed to allow withdrawal of maximum Rs10,000 to a person in a week and the rule of curtailing the withdrawal of cash from ATMs (ie.upto Rs 25000) exists even now.
Then, due to Modi’s second financial reform of Goods and Services Tax (GST), petty and medium traders were largely affected and small and medium industries had to shut down. Textile industries protested against the GST and the inflation has increased sharply thus affecting the Middle Class and common man badly.
Prime Minister Narendra Modi’s gamble brought down India’s GDP growth and Finance Minister Arun Jaitley defended the move saying that idea behind demonetisation was to not just eliminate black money but also to increase transparency, digitisation, tax base, formal sector, minimize the cash in the economy and to curb terror funding.
The Modi government was hugely benefited due to the massive revenue collected by the savings of the hard earned money of the people by terming it as black money and diverted revenues to digital companies that erupted after demonetisation.
Because of the complicated system inbuilt in the GST, the business people had to hire Chartered accountants for filling their tax returns thus further reducing their profits.The main motive behind demonetisation and GST was to increase the tax base on farmers and even beggars etc.
By: Arti Bali