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December 1, 2016

Bengal Finance Minister Amit Mitra slams note ban

Bengal Finance Minister Amit Mitra slams note ban

“Only an authoritarian government can calmly cause such misery to people,” said Nobel Laureate Amartya Sen on the government’s demonetisation move. Concurring with this thought Amit Mitra, Finance Minister of Bengal said no democracy with a money market has withdrawn 86 percent money from the market.

Dr Mitra said FMCG sales have fallen by 35-40 percent. About 70 percent of secondary steel plants in Bengal are not working after demonetisation. India is seeing recessionary tendency due to this move, he added. It will take six months for the government to remonetise the economy, Dr Mitra said. Economists have also agreed that gross domestic product (GDP) will decline by 100-300 bps due to demonetisation.

Joining the crusade against the currency ban, Dr Mitra said the government was not prepared to implement this scheme. Due to the cash clean-up, informal sector in all states is in deep trouble, he said. On deposits made in Jan Dhan account, he said for political purposes government had leaked that West Bengal ranked number one when on the contrary, the state is ranked number 10.

Talking about the Income Tax Amendments Bill announced by the government on Monday, the economist said the government has admitted its failure by introducing an amnesty scheme for the black marketeers.

Dr Mitra, who is also the Chairman of the Goods and Services Tax (GST) Panel, said the indirect tax regime is the biggest fiscal reform in the country and it not a tax rate issue. Since the roll-out of the demonetisation scheme, there are serious concerns over GST rules. The scheme is a second whammy for the states, much bigger than GST process, Dr Mitra said.