EC should raise free cash movement limit to Rs 5 lakh: Assocham

Contending that the free cash movement limit of Rs 50,000 was leading to harassment of traders at the hands of state police, Assocham today said the limited should be raised to Rs 5 lakh by the Election Commission.

Any cash beyond Rs 50,000 could be subjected to scrutiny by EC nominated flying squads and the individual or entity carrying the amount should furnish documents in this regard.

"It is not only the traders but also ordinary households who have become wary of this rule.

"The worse is that many citizens are not aware of this EC guideline because of which common people and small traders carrying cash worth Rs 50,000 or more are harassed and sometimes the cash is confiscated," Assocham Secretary General D S Rawat said.

"Therefore, the limit of free cash movement during elections should be raised to Rs 5 lakh," he added.

Sales at jewellery stores, especially in the unbranded outlets, have also been affected due to the cash movement restrictions, Assocham said.

"We have a long way to go before we completely move away from the cash economy to cheques and plastic money. Credit penetration and acceptance at the merchandise level is low in India and retailers do not accept cheques happily, fearing harassment by taxmen," Rawat said.

As the rule applies to private individuals as well, one needs to explain the legal source and end use of money. As a result, frequent travellers are facing problems since they have to undergo security checks at the airports. Similarly, wedding shoppers are also facing problems, the industry chamber said.