Relief fund mooted to mitigate note ban pain

Plan board panel submits report, urges States to persuade Centre

Constitution of a national demonetisation impact relief fund has been mooted for mitigating the impact of demonetisation on the vulnerable sections and funding Plan programmes for them.

A committee formed by the State Planning Board to study the impact of demonetisation on the State economy, in its final report submitted on Friday, said that States, irrespective of their political differences, should join hands to persuade the Centre to constitute the fund.

Committee chairman C.P. Chandrasekhar, Planning Board Vice Chairman V.K. Ramachandran, and member D. Narayana told reporters that the special transfers from the proposed fund could be used to finance direct benefits to the worst affected sections in the fisheries, coir, and such others sectors in the State and also finance Plan programmes targeted at them.

Kerala should take the lead to demand discretionary transfers to support the Plan to overcome the resource crunch caused by demonetisation. The Centre should be made to relax the ceiling on borrowings.

In order to support the cooperative banking structure, the committee felt that government agencies should be asked to bank with primary cooperative societies (PCS). KYC compliance and deduction of tax at source should be made mandatory to prevent allegations that the PCSs were vulnerable to exploitation by tax evaders and those engaged in criminal activities.

While advocating a digital push, the Centre should ensure that the cost of digitisation for connectivity, for hosting and facilitating such transactions by banks, was not forced on the citizens. It should also insulate the public from the loss that is likely to incur due to security breaches. Steps should be taken to prevent the collapse of the informal economy too.

The Centre should initiate relief measures to address the pain caused by unemployment and loss of livelihood. The committee proposed that the State government conduct a study to estimate the loss incurred by demonetisation and provide a template on how it could be emulated at the national level, they said.