Demonetization could spark a new digital economy in India
By Manish Gadia
Everybody is talking about Demonetization now a day, some are in favors of the decision and some are against the decision. But the maximum people, I found that they are in favor of the decision, those who has paid their taxes properly and those who are poor or salaried class persons or small farmers or labour class persons, they are normally in favor of the decision without knowing issues and complexities which all the politicians or media persons are raising. They represent the 90% of the society and our country. Some are against the decision. They also have their logic and apparent argument for the disadvantage of the demonetization.
Being a chartered accountant, tax person and having some financial understanding, I do feel that the decision was taken in haste as their going to be lots of side effects and other problems of this decision. It could have been better planned. But as it is said, there is always some argument or suggestion for any decision taken in life or for the benefit of the country and it will remain in future also. The people should understand the intention and the motive behind the decision. For the sake of any problem or side effect, if we don’t take any hard decision, that is also not good.
As a tax man, my understanding is this that India is a Cash economy and there is lot of disadvantage of this situation. There is a parallel economy running for that there is no accounting, records and taxation history for this. A country’s economy is based on two taxation mainly Indirect tax and Direct tax. In India, both tax collection has been in poor shape in spite of being so big country and large working population. In order to have large infrastructure spending and social justice for large population, India has to have proper tax collection system and policy and Indian has to start proper tax paying habits then only India can grow like its past glorious history of being a “Golden Bird”.
Some people are arguing of having some negative impact on the GDP, FDI or economy at large. I think, the Govt should award those persons because they can see the future and the Govt. can use their facility and their power of future seeing by sending them in J & K as they can see where the terrorist is going to attack in future.
Demonetization had been done in past also and had been done in many countries including US in 1969 where corruption and black money hoarding was the main problem. After demonetization, this situation has been improved a lot. The same problem lies in India also now a day. If we start spending more and more through digital mode, corruption and black money can be controlled a lot. I know, that this will not happen in one day. But for any journey, we have to start and take the first step. Anybody who is criticizing it do not know its future benefit. They are seeing the problems being faced at present.
There are lots of other benefits also like fake currency was one of the major problem; Drug mafia, Naxalite and other issues also. The main thing is that the whole India has supported this by and large and has stand in one row with the Govt.’s policy and decision. The implementation issues can be tackled in future. The main aim of the Govt through this demonetization should be to educate the people for digitization and India should improve and spend further a lot in education of its citizen. That should be the main target. Without education, India cannot change. There has to be world class education and universities for studies. India should be developed as an education hub where lot of students, academicians, researchers and professors can take part in the development of the Indian society and country at large.
The Govt should stop the populist major for vote bank politics like transfer the cash subsidy in the poor’s account. In fact, the Govt should try to give their children best of world class education free of cost so that after some years, when the poor’s son become elder, he can earn properly and will not be dependent on subsidy. The taxation structure has to be improved drastically and more and more citizens to be included in the taxation regime. This can be seen as a rehearsal of the GST regime also. The taxation structure has to be very simple and citizens friendly.
This is a big opportunity of cleaning and improving our society, our culture, our long standing habits of non-co-operating with the Govt policies and decisions due to any reason which might had been based on some facts and reason. Its time now to go with the global economy. India also need the same world class infrastructure, education system, transportation system, social security system and Indians can have this.
Demonetization is not only change of currency, it’s also change of behavior, pattern of thinking, responsibility towards our nation. Each and every educated and honest citizen should take part in this national celebration. Each and every citizen who understand this should educate other people also that their money is their only. They have to just change their spending behavior only. It’s a long old habit. It will go in few days and time will only tell the benefit and disadvantage of this action.
Manish Gadia is a CA in Kolkatta
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