Assuring Prime Minister Narendra Modi of India Inc’s “full support” in the fight against black money and corruption, industry body Assocham on Thursday said though the short-term hardship would lead to long-term cleaning up of the economy, some immediate relief should be considered for the industry, SMEs and trade.
Assocham also reiterated industry’s commitment to earlier initiatives such as income disclosure and foreign money. These schemes have been well received by all the right thinking people, the industry body said on the 10th day of demonetisation of Rs 1,000 and Rs 500 currency notes.
Suggesting a number of relief measures to deal with the current situation, it said in a statement non-banking finance companies (NBFCs) should also be allowed to accept old notes till December 31, 2016, subject to certain safeguards such as crediting the amount only to the borrowers’ accounts and strict adherence to the money laundering laws.
It said the weekly limit of Rs 50,000 per week from the current account was meagre. Besides, banks were not clear about it as yet and several of them had not implemented the current account limit. Small and medium enterprises, which employed casual labour on a large scale, should be provided a special dispensation.
“A limit can be fixed according to size of the sales turnover of a company and depending on the sectors.”
Even though India Inc operates in the organised sector of the economy, which is connected electronically or through banking transactions such as cheque payments, it has strong linkages with a large chuk of the unorganised sector, including agriculture, casual labour, transportation and other services. Likewise, the entire distribution chain for items of mass consumption, the value chain from retail to the large distributors, was not totally cheque or electronic payment driven.
Assocham said the government may consider extending the same facilities as were being given to state-owned petrol pumps and cooperative stores for temporary trade in Rs 500 and Rs 1,000 notes, subject to a ceiling of Rs 5,000 per customer, who would leave a proper ID with the retailers. Besides, the traders could also be asked to maintain strict stock details with a foolproof system against back-dated transactions and other misuse. Considering the limitations of the Income Tax Department, the staff in state governments and other Central departments could be deployed with a provision for strict penalties on misuse.
It said the chamber has also received queries from members regarding exchange of currency by NRIs. “Can they exchange notes from the branches of Indian banks operating overseas as well as from the other international banks?”