Yashwant Sinha, who has been hopping mad at the BJP setting his own son Jayant Sinha against him and hopping from TV channel to channel with barrage of charges against the Modi government, says deposits of practically the entire quantity (99 percent) of demonetised notes into bank accounts spells the failure of the demonetisation scheme itself. Finance Minister Arun Jaitley and others, including yours truly, have countered this line of reasoning by saying the dominant objective of demonetisation was mainstreaming the unorganised and subterranean sectors of the economy and not confiscation of ill-gotten cash. Be that as it may, he then went on to say that depositors of the demonetised notes during the demonetisation period should be left alone as scrutinising their activities and antecedents would be a prolonged and painful affair for everyone.
Should the crooks be left severely alone Mr. Sinha? Modi government’s distractors have been going to town saying demonetisation was yet another official amnesty-cum-money laundering scheme that was lapped up by crooks through the deposit route. But the government is not done yet as Sinha himself concedes---lakhs of depositors are being harassed! It is widely known that crooks including BSP Supremo Mayawati’s brother have brazenly and blithely deposited cash into their bank accounts in the smug belief the long arm of law cannot find their source.
But the CBDT has software to flag abnormal deposits based on past turnover and income and other parameters of the depositors. Many jewelers who played ball with crooks during the ungodly hours of the night of 8 November, 2016, are already shaking in their boots. Their bluff and bluster would be called sooner or later. Would Sinha and his ilk then eat their words?
Crooks had no alternative but to deposit their ill-gotten demonetised notes in their bank accounts when they found ground slipping from under their feet---they were elbowed out of the exchange counter which they thought they would use with impunity by hiring underlings from the poorer strata of the society for crumbs. When the exchange counter was becoming difficult to access, crooks had another option apart from depositing---participating in the PMGKY under which 50 percent of the ill-gotten cash had to be paid as cash and 25 percent parked in a four-year interest-free deposit. The game was up. PMGKY extracted a huge price. Hence deposit heroically and let us cross the bridge when we come to it, became the philosophical refrain.
The Modi government must be lauded for applying the squeeze on the crooks, for smoking them out. The surge in bank deposits has made banks awash with funds. And yet there is a slow-down in the economic activity. The Modi government must encourage banks to give loans liberally subject of course to security and safeguards. The huge bad debts overhang has naturally made banks go slow on the loan disbursal front. Banks must lend. Otherwise how would they earn their profits except through dubious means like applying the squeeze on depositors with minimum balance requirements and other pressure tactics bespeaking of pettiness.
Coming back to Sinha taking up cudgels for crook-depositors, the fear of possible harassment and cost can never be the ground for backing off tamely in the face of deceit and dishonesty. It is also true that at times when a dragnet is unfurled some innocents too might fall into the trap. The remedy for possible high-handedness is fine-tuning and refining the banking-cum-tax software so that genuine deposits as far as possible are not questioned and challenged. In any case, genuine depositors would have no difficulty in explaining their deposits beyond Rs 2.5 lakh which is the cut-off point for scrutiny.
Published Date: Sep 29, 2017 05:03 pm | Updated Date: Sep 29, 2017 05:03 pm