After his speech in the Rajya Sabha on demonetisation, former Prime Minister Manmohan Singh has elaborated on his comments in a column in The Hindu on Friday.

Singh wrote that in the attempt to crack down on black money, the government had made it easier to generate unaccounted wealth with the introduction of a Rs.2,000 note. &quot;This brazen policy measure has neither tackled the stock of black money holistically nor has it stemmed the flow of it,&quot; he opined.

In his column, Singh acknowledged the intentions of Prime Minister Narendra Modi&#39;s move to crack down on fake currency and black money, calling them &quot;honourable&quot; and deserving of whole-hearted support. However, the former PM derided &quot;the false notion that &lsquo;all cash is black money and all black money is in cash&rsquo;&quot;.&nbsp;

&quot;This is far from reality,&quot; he wrote.

Asserting that 90% of the country&#39;s workforce still earned their wages in cash, Singh said that &quot;cash is the bedrock of the lives of these people&quot;. He added that seeing long lines of poor Indians standing to withdraw money for basic sustenance was &quot;heartbreaking&quot;.

Singh wrote that consumer confidence had taken a hit because of the sudden note ban and that this could lead to &quot;severe economic ramifications&quot;. &quot;The macroeconomic impact of this decision of the government is likely to be hazardous,&quot; he said.

The former PM warned of tough times in the next several months as the &quot;ripple effects&quot; of the demonetization decision would be felt on GDP growth and job creation.

Speech in Rajya Sabha 
On Nov 24, in a speech in that Parliament, Singh had termed the roll out of demonetization as &quot;monumental mismanagement&quot; and a case of &quot; organised loot and legalised plunder.&quot;

Singh, who was fielded by the Congress to take on the government made an uncharacteristically hard-hitting speech in the Rajya Sabha in the presence of Modi. The economist- politician said the drive will result in a decline of 2% in GDP and went ahead to warn that it could be an &quot;under estimation&quot;.

&quot;These measures convinced me that the way the scheme has been implemented, it&#39;s a monumental management failure. And, in fact, it is a case of organised loot and legalised plunder. It is not my intention to pick holes what this side or other side does. But I sincerely hope that the PM even in this late hour will help find us practical and pragmatic ways to provide relief to the suffering of the people of this country,&quot; a usually reticent Singh said, attacking the Modi dispensation.

Singh claimed agriculture, the unorganised sector and small industries have been hit hard by demonetization and people were losing faith in the currency and banking system.

&quot;My own feeling is that the national income, that is the GDP of the country, can decline by about 2 percentage points as a result of what has been done. This is an under estimate and not an over estimate. Therefore, I feel the Prime Minister must come with some constructive proposal on how we can implement the scheme and at the same time prevent the distrust that has been caused to the common people,&quot; Singh said.

The BJP later hit out at the former Prime Minister, saying he &quot;lacks credibility&quot; for such an attack as he himself headed the most &quot;corrupt regime ever&quot;. &quot;Manmohan Singh attacking this government for fight against black money lacks credibility. He himself in his 10 years&#39; regime, had not only failed in tackling black money, but is seen as heading the (most) corrupt regime ever in this country. He was responsible for accumulation of black money,&quot; BJP General Secretary said on December 4.

(This report first appeared in DNA)

The former India PM warned of tough months ahead as the 'ripple effects' of demonetisation are felt

After his speech in the Rajya Sabha on demonetisation, former Prime Minister Manmohan Singh has elaborated on his comments in a column in The Hindu on Friday. Singh wrote that in the attempt to crack down on black money, the government had made it easier to generate unaccounted wealth with the introduction of a Rs.2,000 note. "This brazen policy measure has neither tackled the stock of black money holistically nor has it stemmed the flow of it," he opined. In his column, Singh acknowledged the intentions of Prime Minister Narendra Modi's move to crack down on fake currency and black money, calling them "honourable" and deserving of whole-hearted support. However, the former PM derided "the false notion that ‘all cash is black money and all black money is in cash’". "This is far from reality," he wrote. Asserting that 90% of the country's workforce still earned their wages in cash, Singh said that "cash is the bedrock of the lives of these people". He added that seeing long lines of poor Indians standing to withdraw money for basic sustenance was "heartbreaking". Singh wrote that consumer confidence had taken a hit because of the sudden note ban and that this could lead to "severe economic ramifications". "The macroeconomic impact of this decision of the government is likely to be hazardous," he said. The former PM warned of tough times in the next several months as the "ripple effects" of the demonetization decision would be felt on GDP growth and job creation. Speech in Rajya Sabha On Nov 24, in a speech in that Parliament, Singh had termed the roll out of demonetization as "monumental mismanagement" and a case of " organised loot and legalised plunder." Singh, who was fielded by the Congress to take on the government made an uncharacteristically hard-hitting speech in the Rajya Sabha in the presence of Modi. The economist- politician said the drive will result in a decline of 2% in GDP and went ahead to warn that it could be an "under estimation". "These measures convinced me that the way the scheme has been implemented, it's a monumental management failure. And, in fact, it is a case of organised loot and legalised plunder. It is not my intention to pick holes what this side or other side does. But I sincerely hope that the PM even in this late hour will help find us practical and pragmatic ways to provide relief to the suffering of the people of this country," a usually reticent Singh said, attacking the Modi dispensation. Singh claimed agriculture, the unorganised sector and small industries have been hit hard by demonetization and people were losing faith in the currency and banking system. "My own feeling is that the national income, that is the GDP of the country, can decline by about 2 percentage points as a result of what has been done. This is an under estimate and not an over estimate. Therefore, I feel the Prime Minister must come with some constructive proposal on how we can implement the scheme and at the same time prevent the distrust that has been caused to the common people," Singh said. The BJP later hit out at the former Prime Minister, saying he "lacks credibility" for such an attack as he himself headed the most "corrupt regime ever". "Manmohan Singh attacking this government for fight against black money lacks credibility. He himself in his 10 years' regime, had not only failed in tackling black money, but is seen as heading the (most) corrupt regime ever in this country. He was responsible for accumulation of black money," BJP General Secretary said on December 4. (This report first appeared in DNA)

Manmohan Singh: Rs 2,000 note makes it easier to generate unaccounted wealth

The Indian government is planning to introduce amendments to the Income Tax Act in the ongoing session of Parliament which will attract a minimum of 50 per cent tax on unaccounted bank deposits made in scrapped currency noted up to December 30, if declared to taxmen.&nbsp;

Sources told PTI, the proposal could also include a lock-in period of 4 years for half of the remaining amount, or 25 per cent of the original deposit.&nbsp;

In case the assessees do not disclose the unaccounted cash voluntarily and the money is detected by tax authorities, it will be charged with 60 per cent tax and a longer lock-in period, the sources added.

The amendments to the Income Tax Act were approved by the Cabinet last night and will now be presented in the Parliament, sources said.&nbsp;

Earlier, the tax authorities were considering levying a peak rate of tax and an added 200 per cent penalty on unexplained deposits above Rs 2.5 lakh. But they felt that such a move may not have legal backing.&nbsp;

This week, the government had ended the over-the-counter exchange of old currency notes at the banks, in an effort to encourage the people to make deposits to their bank accounts. All old Rs 500 and Rs 1,000 notes can be deposited in bank accounts without any ceiling.&nbsp;

The government had allowed a 50-day window from November 10 to December 30 to deposit the banned currency in bank accounts.&nbsp;

(WION with inputs from PTI)

&nbsp;

The government is expected to present the proposed amendments to the Income Tax Act in the ongoing session of Parliament

The Indian government is planning to introduce amendments to the Income Tax Act in the ongoing session of Parliament which will attract a minimum of 50 per cent tax on unaccounted bank deposits made in scrapped currency noted up to December 30, if declared to taxmen. Sources told PTI, the proposal could also include a lock-in period of 4 years for half of the remaining amount, or 25 per cent of the original deposit. In case the assessees do not disclose the unaccounted cash voluntarily and the money is detected by tax authorities, it will be charged with 60 per cent tax and a longer lock-in period, the sources added. The amendments to the Income Tax Act were approved by the Cabinet last night and will now be presented in the Parliament, sources said. Earlier, the tax authorities were considering levying a peak rate of tax and an added 200 per cent penalty on unexplained deposits above Rs 2.5 lakh. But they felt that such a move may not have legal backing. This week, the government had ended the over-the-counter exchange of old currency notes at the banks, in an effort to encourage the people to make deposits to their bank accounts. All old Rs 500 and Rs 1,000 notes can be deposited in bank accounts without any ceiling. The government had allowed a 50-day window from November 10 to December 30 to deposit the banned currency in bank accounts. (WION with inputs from PTI)

Demonetisation: Unaccounted deposits could attract 50 per cent tax, four year lock-in period

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