FINER hails Centre's decision of demonetisation

FINER hailing this demonetization move, cautioned that the necessary follow – up has to be done by the Centre so that there are no lapses in the exercise that aims to curb black money¸ corruption and counterfeit currency, and the benefits outstrip collateral damages which is bound to happen in a decision of this magnitude.

Small time traders, mostly in the unorganized sector have been hit by the move, but this is a temporary phase.

FINER said that it is a bold step by the centre but the follow up has to be done.

“The government has since it assumed office, has taken a number of steps to attack the menace of black money, starting almost immediately by setting up a Special Investigation Team (SIT), enacting a law governing undisclosed foreign income and assets, amending the  Double Taxation Avoidance Agreements with different countries, agreement with Switzerland for getting information on bank accounts held by Indians there, encouraging the use of non-cash and digital payments, amending the Benami Transactions Act and implementing the Income Declaration Scheme 2016," FINER  president Pabitra Buragohain said in a release.

"Demonetization is the latest and the furthest reaching step in the government’s direction. There are challenges that exist with its execution and that remains crucial.  The government has further steps in line which could include steps for curbing Benami property, and having audit trails with the implementation of GST, Real Estate sector etc.,” he said.

“This move to withdraw high-denomination notes is expected to dent immediate consumption, especially of high-end goods, but will have a positive impact on growth and inflation in the long run. Sectors with a sizeable magnitude of cash transactions are expected to get adversely affected. The government must devise effective measures to reduce the problem being faced by the common man. Whenever a new system takes birth, it creates temporary inconvenience; however, subsequently it shall prove to be beneficial for the medium and long term for the country,” Buragohain said.

“In the North Eastern Region, the stake holders in the construction, tea and micro-finance sectors are among the worst hit by the demonetization of Rs. 500 and Rs. 1000 notes. While this is a transition period and we expect thing to settle down once new currency circulates in the market, but sectors that are dependent on cash payment have to suffer."

"The micro-finance sector where a majority of the repayments are done in cash, mostly in denomination of Rs. 1000 and Rs. 500 notes has been hit as well, but we see these as short term hiccoughs. On the whole we feel demonetization is a very good move. The thought and intent behind it is very good. This is not just the only thing that we are seeing, and we may expect more such measures in the future,” the FINER president said.

(Reporting by Hemanta Kumar Nath)