Letters: Cash is not illegal

With reference to Shekhar Gupta’s article, “Mammaries of the Socialist Raj” (November 26), the move to de-legalise certain currency notes has not only allowed bureaucrats to retreat to their comfort zone of issuing rules and then tinkering with them, but it has also encouraged their propensity to impose rules without knowing the reality beyond Delhi.

It is not just the spate of breaking news-type of rules, but also a clear threat that the taxman will find new hunting ground for harassment and payback for not harassing. In many cases, a deposit of, say, ~3 lakh will be from the lifetime savings of a housewife, or a cash advance from a sale of crop or a future land sale by a farmer where the sale has not been completed — that is, the inflows that never were taxable income at all.

The government’s actions at times seem contradictory. Even assuming that every Indian has a smartphone, PAN card, bank account, debit card and cheap reliable internet, he will still end up paying more because of data and transaction charges; today, when he uses cash, he incurs no additional cost. Most e-wallets have a maximum limit of deposit. Someday, the income tax authority will ask one to produce a Paytm account statement and explain all entries. The worst will be a banking transaction tax, as suggested by some. Apart from being regressive, it will discourage people from using banking methods and to go for cash. Banks’ CASA (current account, savings account) will be hit, cash holdings will rise and the velocity of money will fall.

Cash currency is legal tender and people’s trust in it is critical. It is not anti-national, immoral or illegal to hold and use currency, for money is a medium of exchange.

 P Datta Kolkata

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