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Monday, November 19, 2018

THE GOVERNMENT IS SILENT ON POST DEMONETIZATION CELEBERATION

By on Monday, November 19, 2018

By Umashanker Singh; IFS, PhD  
Majority of us probably may not be knowing as yet that how many central schemes do we have in our country as various Government Schemes have been launched since 2014 for the welfare of citizens of the country; but we are not sure that how far have we gone in to it and its impact assessment requires to be done by any independent agency in order to bring about transparency. These schemes can be operational at the State level, Central level or at, Central and State both.
I was surprised to see that Government of India has launched as many as 83 schemes till date, but have not found any noticeable impact on the economy. Demonetization was one of the schemes launched on the fateful evening of November the 8 th, 2016. This yet more surprising to all of us that why central government did not celebrate the second anniversary of demonetisation, one of its biggest policy initiatives while it has celebrated the anniversary of all other big policies? Why this step motherly treatment to one of the Prime Minister Brain child?
The stated objective of the demonetisation by the prime minister was as below:
1-The most important objective of the demonetisation was to eradicate black money from the Indian economy.
2- To lower the cash circulation in the country which "is directly related to corruption in our country,” according to Prime Minister.
3-The third most important objective was to eliminate fake currency and dodgy funds which have been used by terror groups to fund terrorism in India.
When it appeared to the government that bulk of illegal currency might return to the banking system, it began shifting the goalposts by adding new objectives of demonetization move. 
Hence, policy objectives such as promoting digital transactions and taking country towards a “cashless” economy (subsequently modified to a “less-cash” economy) were added later. The goal to make India a cashless economy seems more as an afterthought plan. These objectives, despite desirable, were not listed in the earlier official notifications. 
Now the interesting fact is something else which did not come out at the time of demonetisation. The Minutes of the RBI Board Meeting on November 8, 2016, that recommended demonetisation had made it clear that demonetisation was not the way to tackle black money or counterfeit currency. 
Thus, two of the main objectives that were emphasised in the PM’s announcement on demonetisation were undermined the very day the policy was announced. No wonder, soon after it became clear the money was flooding into the banks, the government started talking of a cashless economy and later on it was said that these deposits would create a paper trail and black money generation would become difficult .
Initially, there was a spurt in the use of electronic means of transactions; but this pace could not be sustained as more currency became available. The country had anyhow been slowly moving toward a less cash economy prior to demonetisation and this has continued. 
It was said that the government would restrict currency in circulation to less than what existed on November 7, 2016. But now the currency in circulation is about 10 per cent more than the Rs18 lakh crore that existed prior to demonetisation. To be fair, it is less than what it would have been if the increase in currency in circulation had continued at the pace prior to demonetisation. Now the finance minister has cited three achievements of demonetisation namely,
Increase in currency in circulation had continued at the pace prior to demonetisation. Now the finance minister has cited three achievements of demonetisation namely,
1-    An increase in digital transactions.
2-     Expansion in the tax base with more people paying taxes.
3-    Thirdly, the creation of paper trails that will make it difficult to generate black incomes in the future.
Interestingly, echoing the RBI Board, he said confiscation of currency was not an objective of demonetisation. The line earlier was that black money, held in the form of high denomination notes, would not return to banks since that would create paper trails. The then Attorney General had told the Supreme Court that Rs 3 to 4 lakh crore would not return to the banks.
 Soon it became clear that all the money would come back since those holding black money had worked out ways of converting their old notes to new notes. The government then started saying that was good since the people who had deposited large sums of money could be investigated.
 Now try to understand how the government is trying to hedge its failure of a decision which has ruined many of us in term of economy. The government has issued about 18 lakh notices to those who had deposited more than Rs 5 lakh into their bank accounts.
However, there is a misperception that equates cash with black money. Cash is needed by businesses as working capital and households keep cash in hand for transactions and as a precaution against contingency. So, a petrol station may have deposited Rs 20 crore in the demonetisation period of 50 days, based on its daily collections. This is not black money. Most of those who deposited large sums of cash would have worked out how to show the deposits as cash in hand in their balance sheet. So, it would be difficult for the tax department to prove that the money deposited was black.
Finally, data shows that the department does not have the capacity to audit so many accounts, in addition to the usual audits it conducts and most importantly despite the facts being otherwise, the government keep saying that they have taken action against people having black money and income tax law will take its own course in due time.
REASON FOR AN INCREASE IN TAX RETURNS
Yes, the number of returns being filed and tax being collected have increased. But, the direct tax to GDP ratio has hardly increased compared to the pre-demonetisation period. The black economy is more than 60 per cent of the GDP and even if 10 per cent of it had come into the tax net, it would have yielded 2 per cent of the GDP as additional tax collection. This has not happened.
Even when we consider collection of direct taxes within the country, there seems to be a broad correspondence between levels of per capita income and per capita tax collections. As the chart below shows, the richest states of the country—Delhi and Maharashtra—lead the league tables in terms of tax collection. Some of the states with the lowest per capita incomes—such as Bihar and Uttar Pradesh—tend to contribute lower amounts of direct taxes (in per capita terms).
Thus, the most potent solution for raising India’s tax-GDP ratio is to raise economic growth and average incomes. India’s recent economic history also bears testimony to this finding. As the chart below shows, tax-GDP ratio of the country rose the fastest during the boom years of 2002-08. It is well-known that 67 per cent of those in the tax net file either nil return or very low returns. The effective number of taxpayers has always been low in India. Even in the case of GST, the FM is on record saying that 5 per cent of those under GST pay 95 per cent of the tax.
Further, he has lamented that even though 1.1 crore have registered under GST, only about 67 per cent pay tax. The spurt in filing of returns is partly due to the fine being imposed from this year for late filing. So, many more have filed returns in time. Earlier many waited till March 31 to file returns. The numbers have also increased because of the increase in salaries after the implementation of the Seventh Pay Commission report.
However, most of the increase will be in the category of those who have just entered the tax net. So, the increase in tax collection will not be much. The increase in the number of those who filed tax returns is a result of other factors, and only marginally due to demonetisation.
 CONCLUSION
Increased digitisation could have been achieved without causing pain to the economy. Nigeria has a low cash GDP ratio but a big black economy. Japan has a high cash GDP ratio but a small black economy. So, digitisation does not necessarily check black income generation. Finally, formalisation does not help reduce the black economy since the informal sector hardly generates any black incomes. Most incomes in this sector are way below the taxable limit which is rather high in India at three times the per capita income— with concessions and deductions it can be five times the per capital income.

Regulating the Regulator

By on Monday, November 19, 2018

By Akash Verma; Bangalore
With the passing of the first month of Q-3 FY 2018–19 much had been said and heard between the sovereign Finance Ministry and the Central Bank (i.e Reserve Bank Of India).The tussle, indeed no denial, has been persisting between the two bodies for quite some time now; but the way it had begun into such an ugly cold war face and turned out to be a hard pill that could not be swallowed. The question now to ponder upon is what actually had gone wrong that it led to such a high-level blame game.
RBI though formed under the ambit of the Reserve Bank Of India Act, 1934 has been functioning comprehensively since then, has never given the status of CONSTITUTIONALLY INDEPENDENT authority albeit evolved overtime a fully autonomous bodies subsuming the functionalities of regulating the capital markets & banking sector, chalking down the Monetary Policies, balancing the exchange rate and keeping the inflation under permissible limits.

Finance Minister Arun Jaitley (Left) and RBI Governor Urjit Patel (Right)

On the other spectrum Ministry Of Finance, under the constitution of India, has all the sovereign rights by virtue of being chaired by the elected members unlikely the nominated members of the Central bank, had never failed any chance to up the ante in the matters, falling in the intersection, of the two bodies; specifically concerning the financial and economical parameters of the country.
The tussle between the Ministry of Finance and the RBI had gained momentum when the strict PCA (Prompt Corrective Action) Norms was imposed by the RBI onto the 11 state-owned banks to put a lid on their excessive lending to certain sectors; this lending resulted in a liquidity crunch.

The brat of which is faced by the Central Government because of their political inclinations and the upcoming general election of 2019 by hampering the vote base from the corporate sector.
As a result of this, Union Government wants RBI to ease down the PCA norms citing that the accumulation of the NPA (non-Performing Assests) is due to the latter’s lack of vigilance and the Global Financial Crisis, which results to the growth of NPAs amounting to 10 Trillion Rupees spanning in the post GFC regime (2008–14).
On the other hand RBI via PCA had drafted a very comprehensive frameworks of AQR (Asset Quality Review) and CRILC ( Central Repository of Information on Large Credits), which act a primitive measure of keeping track of the financial health of the banks under consideration, is quite stern on its stance to not dilute the PCA Norms.
Viral V. Acharaya, Deputy Governor RBI
This cold war assumed a shoddy face when Deputy Governor of RBI ,Viral Acharya while delivering A.D Shroff Memorial Lecture in Mumbai on Oct 26 passed a strong statement in public “The risks of undermining the central bank’s independence are potentially catastrophic. Governments that do not respect central bank's independence will, sooner or later, incur the wrath of financial markets, ignite economic fire, and come to rue the day, for they undermined an important regulatory institution”.
The repercussions of which had made the Ministry of Finance to issue letters to the central bank invoking the Section 7 of the RBI Act,1934 which gives authority to the Govt Of India to seek consultation with board of directors of the latter and in the matter when the parties doesn’t reach to a common ground, it will give precedence to the Govt.Of India to act as the proxy to the Central Bank superseding all the regulatory authorities bestowed on the Central bank under the RBI Act.
Bombay Stock Exchange,Mumbai
It is a matter of grave concern to even foresee the implications which if Article 7 of RBI act,1934 exercised by GoI giving directive to RBI, as it will dilute the regulatory authorities of the central bank which will cast a negative shadow on the financial market of the nation and hamper the investor’s confidence. It will be in the interest of the financial stability of the nation that both the parties should converge to a common resolution and act jointly to sail through it amidst the atmosphere of global tension lurking in the background.

Thursday, November 15, 2018

Muslims may leave Ayodhya before November 24

By on Thursday, November 15, 2018

Mr Mohammad Iqbal, plaintiff in the matter of Babri Mosque and Ram Janam Bhaumi dispute, has warned the local administration that the Muslims can leave Ayodhya in the wake of crowd arrival in a scheduled progarme by Shiv Sena and Vishwa Hindu Parishad on November 24-25.

It is noticeable that Shiv Sena, Vishwa Hindu Parishad, International Hindu Parishad and RSS—all are to reach at the disputed place for the purpose of Ram Madir that has comprised arrival of Shiv Sena Chief at Ayodhya  in person for a holy sight of Ramlala.
According to the sources, the main Hinduvadi organizations including saints in large numbers have begun the preparations to march Ayodhya. The people and the saints in large numbers are following the preparation to reach there.
Iqbal said, “It is apprehended that the surge of crowd on November 24-25 may be overcrowd, exactly as it was on December 6th, 1992. Not only Babri Mosque was demolished then, but also many worship places were ransacked; many houses were set on fire."
Iqbal added, “If his and other Muslims were not assured for the security here, there is no way except to leave Ayodhya.”

Sunday, November 11, 2018

Afghanistan after death of Abdul Razik; a review

By on Sunday, November 11, 2018


The increasing influence of Taliban over the territory and battling its continued attacks in the region, the Afghan government is facing consecutive setback.
As there was a meeting going on in Southern province, Kandhar, of this country, on October 18 last month; a terrorist, disguised as security man, reached there and gunned down Abdul Razik, police chief and Abdul Momin, intelligence chief. Taliban took the responsibility.
The importance of Abdul Rajik can be understood that the election of Kandhar province was postponed after this killing. Many renowned personalities including PM Narendra Modi expressed their grief for this incident.
It is said after the killing of Abdul Razik that the incident has paved the way of Taliban to siege the Southern province. Is it true indeed? Many international journalists’ opinion is so.
They say that Afghanistan, especially in Kandahar Province, Abdul Razik’s respect was at its acme than other police officers. He was as a national commander there. He was count among a strongman in Southern Afghanistan, which USA supported him ignoring the Afghanistan government.
Razik was too influential that he had declined to have taken the order of Afghan government. He condemned President, Ashraf Ghani, many times, but the action was never taken against Razik because of American intervention.
Abdul Razik expelled Taliban from Kandahar in his commanding of Afghan army with the help of American till 2014. Taliban had always been battling to take over Afghanistan in Razik's presence. However Taliban once again has controlled on vast area of Kandahar with the help of Iran and Russia, after leaving US army Afghanistan. If the peace talk is held, Taliban shall be domineering in future because they would have been spirited much after Razik’s death.
Ashley Jackson is one of the journalists who has met with Abdul Razik and is familiar with his respect and the influence in the region.
Taliban has won a tough battle of Afghan’s future by killing Razik, he says. If let us accept Jacson’s view, there is no able officer who can render his duties like Abdul Razik in Afghanistan after Razik’s death. Other known person assume that his departure has created a 'power vacuums' among the security forces that is good news for Taliban.
Whatever a brief meeting or talk held between Taliban and Afghanistan had also a role of Razik? This death has caused a situation of commanding void in armed power.
According to the conversant with the issue, Taliban shall take its benefits and shall have the Afghan Government accepted its conditions for the control of territory.
That his image was not limited only to the trusted personnel or commander of armed force, but Razik being so dominant: the reason was that he had been national hero among the people of Afghanistan. He was most popular in Kandhar because that he was ‘Achakjai’. This surname is belonging to Durrani Kabila that had been the past ruler of Afghanistan’s history.
Ashley Jackson wrote in her article after Razik’s death, “not only Southern Afghanistan but also the whole country’s weak future is now under growing threat. The mounting of violent clash is imminent after the year 2001. According to the armed experts, Kandahar is a territory where it a little economically flourished than other areas of this country and was away from the access of siege policy of Taliban. Razik was accepted national hero of Afghanistan."
She added in her article, “Razik was the accused of war crime, but he had expelled Taliban; and opposing the intervention of Pakistan in Afghan issues, he garnered the pleasure of Kandahar people. Razik used to pay atrocities with the enemy, but it does not affected his image among the people of Kandahar rather he was appreciated.”
According to Jackson, “After Razik’s death, Taliban shall intense its effort repeatedly to siege those areas where its fighter militants had surrendered.
Only if Afghanistan is most insecure after the death of a police officer, a class admits its cause of US wrong policies there and the politics of country. The politics of Afghanistan has been under the dominance of Army Chiefs. America and international community favoured there democracy after 2001; but together like Abdul Razik, they supported powerful Army Chiefs.
According to Ashley Jackson, the America's patting to Razik that improved mere such situation in Afghanistan that could have made America benefitted. If we accept her, America always enforced to find the quick solution of problems for what there could have not been maintained economic and political stability for long term. It sowed seeds of ignoring the democratic government and happening of violence in future. The present situation is its result.
Actually America and other international powers reckoned that only Abdul Razik could have combat better to Taliban. Well, they ignored the negative effect of Abdul Razik; consequently he garnered so dominance that he began to run a parallel government. According to many media reports, Razik had established the drugs addiction business. he was accused of Human Rights violation and atrocities with the captured people(including Taliban militants) during the violent clash. Wiki leaks had told in its report 2010 that US was aware of all these facts, but it was going on the policy with the assumption of security guarantee to Afghanistan. The guarantee has now ended and at least Taliban got an open way to make its political and armed strong hold in Southern Afghanistan.









Friday, November 09, 2018

House turned into ashes; candle factory caught fire

By on Friday, November 09, 2018

KSHITIZ KANT; LUCKNOW
The celebration of Dipawali was  going on; the crackers were in the sky, but one of them barged into a home situated in Birhana under Naka Thana Lucknow on Wednesday late evening. The house caught fire which turned into ashes.
A wax piled home in narrow lane where candles makers were in rest inside stunned when the fire suddenly flared; and they came out of the building. The building had had lodged more than 12 liquidated propane gas cylinders which were fuelling the engulfed fire in the building.
The building were in use of candle makers, and huge wax were piled in the wake of Dipawali which is a festival of light and traditionally candles are used by people for lighting their homes.
According to report, a hot air parachute balloon which were flown in the air fell on the house was burning and set this house on fire.
The fire was intense and the firemen were trying to extinguish it, but the fire caught into the wax; the gasoline cylinders fuelled it. The fire Brigade vehicles reached the spot, but the firemen faced difficulties to control it because the lane which goes  to this place is narrow where the heavy vehicles cannot make its access.

No casualties has been reported, but the house and adjoining families other houses were evacuated; till Thursday morning they were not allowed to return. The damage has not been yet assessed. The factory was in residential  area that has ruined now, which has no license, so the owner and the tenants have been arrested.


Wednesday, November 07, 2018

Man was shot at and looted in Lucknow

By on Wednesday, November 07, 2018
KSHITIZ KANT:LUCKNOW
A man, 30, working as partner in a Modal Shop (Saloon) situated at the Tal Katora Road was looted at a gun point under Khala Bazar Police Station on Tuesday evening in Lucknow, state capital of Uttar Pradesh.
According to the information, Deepu Jaiswal carrying about Rupees 2 Lakh to deposit it to the another liquor shop situated in Aishbagh Locality was passing from a lonely or thinly populated road where has no street lights was intercepted by the two motorcycle borne unidentified assailants who shot at him from the back;snatched the cash bag; and decamped with the booty from the spot .
The incident took place on a road going towards Malviya Nagar joining it to the Tal Katora Road. According to report, Mr. Deepu Jaiswal who sustained bullet injury was lying down about 200 m away from Avtaar Hospital and was wriggling in the blood that a passer by, named Mithun, stopped his bike to see the crowd which had surrounded.
Seeing the critical condition of injured Mithun dialed 100 number to call the police help line where the police reached the spot late. Well, traumatic Deepu was rushed  to get the treatment to the Avtaar Hospital where he was declined for the treatment because of being a criminal case.
Mithun came out and sent him in an Ambulance passing infront which was stopped by the crowd. Deepu is now in KGMU Trauma centre. His Condition is stable and out of danger.
The Police to nab the accused are trying to investigate this loot and murder attempt case from many angles. The investigation is going on and SHO Khala Bazar has claimed the accused shall be in police draggnet earliest.
Mr Vikas Chandra Tripathi,SP West, said to this correspondent out side KGMU, “ Deepu Jaiswal is under treatment. His condition is stated to be stable. The motive behind this bullet injury is not clear because the police have not yet recorded any statement about the alleged loot of any cash from the victim's possession.”




Saturday, November 03, 2018

Police Lathi Charge in front State Assembly of Uttar Pradesh

By on Saturday, November 03, 2018
 Demonstrators beaten in Lathi Charge infront  of State Assembly of Uttar Pradesh
A strong demonstration was staged in protest against the cancellation of government teachers’ appointments on Friday in Lucknow. The Lucknow Bench of High Court Allahabad ordered the cancellation of appointments more than 12000 and has recommended the CBI enquiry into the process of appointment. The demonstrating teachers were on roads against the High Court decision. The police had to control the crowd by Lathi Charge.
12,460 trainee teachers’ appointments have been cancelled by the High Court Allahabad bench Lucknow on Thursday. The notification had been issued during Akhilesh government in the year 2016. one more decision by high court on Friday has created tough situation for Yogi Adityanath’s government when it ordered the CBI enquiry into the case of 68500 teachers posts recruitment done in the beginning this year.
The police protection chain was tried to break when the trainee teachers were demonstrating in front of State Assembly Friday afternoon. Police had to Lathi Charge to control the demonstrators. While the police have claimed none were injured, but the trainee teachers have claimed that many injured and tumbled down on ground in police Lathi Charge.
It is noticeable that the Lucknow Bench of Allahabad cancelled the appointments on Thursday saying the recruitment in the year 2016 on 12460 teachers posts were against the rules. The court in another decision has given order to CBI enquiry into the recruitment on the 68500 vacant posts of assistant teachers of primary schools in the state.
The bench of Justice Irshad Ali disposed many writ-petition filed in the recruitment of 12460 posts of trainee teachers ordered so. The court said the assistant teachers’ recruitment by the government on 21 December 2016 was not according to the Primary Teachers draft service rules of Uttar Pradesh. Court has ordered to government to begin the recruitment process again. The court has given the state government a time frame of three months. the same Bench has  ordered the CBI enquiry for the process that had begun in the recruitment of 68500 posts of assistant teachers under the Advertisement published on January 23 this years.
Court has also directed that the officers found guilty in this recruitment should be taken action against them. The court has ordered the CBI to submit it status report on November 26 and also ordered to CBI to complete its investigation within 6 months.

Friday, November 02, 2018

Delhi Crime Branch solves murder mystery; UP police suspected it honour killing

By on Friday, November 02, 2018

Mohd Azam; New Delhi
The Delhi police crime branch has solved the shrouded mystery over the murder of a family suspected kidnapping from Wazirabad area New Delhi two years ago. The special police team has arrested in this connection a man named Abhishekh. A girl, Naina Kirodiwal, 21, was murdered in July 2016; her body was disposed near canal at Dhaulana in Hapur and a Santro car was recovered from the canal.
When UP police reached to the girl's home then found the family members of deceased were not present there. The police began to search of her family members, but was failed to trace them. Further when they took the help of surveillance to trace the mobile phones of family members, they found all the cell phones were switched off at Wazirabad area.
The police was investigating then to find these unexplained questions:
1-Who and why did commit the murder of Naina?
2- Who had derived Naina’s car up to Dhaulana 100 kilometer away while she had no knowledge of car driving?
3-Where had disappeared her family a day before of her body found?
4-Lest behind Naina’s murder should be her own family, was also a fact.
5- Lest the Naina’s family should be the victim of any hatched conspiracy, think it.
6-Why her and her mother’s cell phone were switched off two days before of her murder?
7- Whether Naina was murdered in Delhi and her body was disposed in Hapur?
The police had suspected Naina’s mother, father and brother were the murderers, and kept on investigating this murder as a case of honour killing.
While the hatched conspiracy was executed by Abhishekh with his accomplice; and UP Police had earlier told that Ved Prakash had killed his family including daughter where Delhi police narrates it -- Ved Prakash is the victim!
According to Delhi Police, Abhishek with his accomplice Babla and other accused assassinated all the 4 family members one-by-one and disposed their bodies throwing  in Ganga canal.
Delhi police got information that Abhishek was involved in this murder case. Police arrested him. When police quizzed roughly, he broke his silence and confessed the crime.
Abhishekh told that his friend Bawla and with the help of Ved Prakash’s relative Sonu had hatched conspiracy. Actually Ved Prakash had had given some money to Abhishekh and Ritesh. Retesh had used to work at Ved’s garment shop, but these were not returning the owed money.   The duo’s activity had resented Ved.
Abhishek hatched conspiracy and to execute these assassinations, he indulged Babla, a local criminal. Trio were to capture the property by killing the family.
Abhishek bought the weapon of murder and later by some trick he took Ved Prakash together. He murdered Ved Prakash with the help of Babla. Actually when Ved Prakash was going with Abhishek, his son, Shubham had seen them. Now he carried Shubham calling by trick and committed  Shubham’s murder too.
He carried Ved’s wife, Sadhna and daughter, Naina one-by-one calling by trick and murdered them; threw four bodies in Upper Ganga canal.
The car was recovered with the Naina’s dead body, but other deceased of family could not have been recovered which caused the assumption of honour killing.
The investigation of Delhi police exposed that it was not an honour killing, but was the planned murders. The murders were executed by Abhishekh, Babla alias Sonu, Ritesh including other. Babla died in Road accident and another accused committed suicide. The police enquiry is still continuing.
The UP police failed through the fact that the accused and deceased were in last contact by cell phones.