Before rejecting the Arthakranti tax proposal in his article "How 'Arthakranti' taxes the system", (January 15), Rajiv Shastri should have done in-depth research. Since every citizen will have to open a bank account and all transactions would be made through the bank, the system will be transparent. Introducing the "zero duty" concept, imposing banking transaction tax at two per cent, and allowing cash transactions of not more than Rs 2,000 will have a massive impact on the generation of black money. It will also lead to a cut-down in hundi and hawala operations, and reduction in commodity prices.
Furthermore, this process will reduce corruption and bribery since little liquid cash will be available in the market. There is also a possibility that the introduction of fake notes will be limited, thereby minimising funding in terror networks. In fact, the poor will be more relaxed paying small taxes since they will not only directly receive the cash in their accounts against all the social benefits schemes, but will also save for rainy days. Other schemes in kind such as subsidised food distribution, free water or subsidised power should be discontinued. If needed, the equivalent value in cash could be transferred to the accounts of the beneficiaries. Thus, this system will stop the siphoning of funds. Poor states might suffer from low collections but this issue can easily be tackled by evolving an accepted model for sharing revenues. Also, the bank accounts of individuals and their family members should be linked.
Tushar Kanti Chaterjee Kolkata
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