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Demonetisation will not help

New Delhi, June 27: Several members are reported to have told the meeting of the Parliamentary Consultative Committee for Finance to-day that demonetisation of currency would not help in unearthing black money in the country. The meeting presided over by the Finance Minister, Mr. Y.B. Chavan heard the views of members on the measures proposed by the Wanchoo Committee for unearthing black money, greater administrative control for tax collection and demonetisation of currency. The committee will to-morrow continue the discussion on the recommendations of the Wanchoo committee on tax reforms. On the question of unearthing black money, it was pointed out by some members that in the recent raids on houses of film stars in Bombay, hardly any cash was found by Income-Tax officials. Black money was not kept in cash but converted into gold jewellery and other valuables. They said many people fearing demonetisation would have converted higher denomination notes into hundred rupee notes which were also in the hands of many people in the villages. Demonetisation of hundred rupee notes was completely inadequate to tackle the problem, they said. Almost all speakers are also reported to have criticised the recommendations made by the committee for reduction of tax rates on personal income. They pointed out that if the tax rates at the highest slab were reduced as recommended by the committee, there was no guarantee that people would still not resort to tax evasion. Members said that lowering of tax rates would not lead to removal of disparities.


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