Brand-new DELHI: The government has actually spurned pressure from industry lobby groups as well as some lawmakers who had approached it to dilute two key moves – mandatory use of PAN for transaction above Rs 1 lakh and the Black Money Bill – announced in the budget to crack down on flow of illicit funds in the economy.
Representatives from several sectors – which see large volumes of cash transactions – have approached ministers seeking watering down of the proposal to make it mandatory to produce permanent account number (PAN) for all transactions of Rs 1 lakh or above. In several sectors, which are known for accumulation of black money, cash transactions are dominant. The presence of illicit cash in the economy also impacts other sectors, including purchase of durables and luxury items in cash.
As part of the crackdown on black money in local economy, finance minister Arun Jaitley has actually also proposed banning advance payment beyond Rs 20,000 for real estate deals.
Arguments ranging from edge impact on economic growth to job losses due to lower demand have been put forward. Sources in the government, however, said the steps were integral to the plan to combat circulation of black money in the economy, a key poll plank of the BJP.
Those versus the clauses have also suggested that the move may cause hardship to consumers as a large number of Indians do not have PAN. The government countered this argument saying it will launch a drive to issue PAN on the lines of the Jan Dhan Yojana, which has actually resulted in almost all households across the country getting access to bank accounts.
The second concern is the bill on black money stashed abroad, which was introduced in Parliament recently. Sources said MPs belonging to parties other than the ruling edge have been lobbying with it to dilute the bill that proposes imprisonment of up to 10 years for non-disclosure and concealment. In fact, sources in the government said, there were suggestions from some MPs to refer the bill to a select committee in an effort to dilute the provisions.
Unlike the proposal on PAN, which is being argued will impact the unorganised sector, it is large industrialists who are complaining about the Black Money Bill, arguing that it gives undue powers to tax authorities and can be misused.
The government has actually countered it by saying that there are enough safeguards to check versus harassment.
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