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After demonetisation move, more tough steps in offing with eye on revenue

Prime Minister Narendra Modi may not stop at the demonetization move that took India by surprise on Tuesday evening.

india Updated: Nov 11, 2016 07:25 IST
Heavy rush at a State Bank of India branch in New Delhi on Thursday.
Heavy rush at a State Bank of India branch in New Delhi on Thursday.(Saumya Khandelwal/HT PHOTO)

Prime Minister Narendra Modi may not stop at the demonetisation move that took India by surprise on Tuesday evening.

“More such moves are in store,” a government leader in know of the Tuesday decision said without elaborating.

The aim is not only to strike at the root of black money or choke funds of terror and Maoists, but also mop up more revenue to change the ‘scale’ of development activities.

“What else are we in power for?” he said. “Our estimate suggests 90% of people will end up supporting the move.”

Modi government is the first in three decades to get a majority on its own and it rode to power in 2014 riding on popular vote against corruption sluggish economy.

There is admission in the government and the BJP about the possible impact of the move on its committed vote base – such as small traders – but realization about the need to take ‘risks’ was too overbearing.

Government leaders feel the demonetisation move will flush the illicit money and fake currency out of economy and help garner more revenue for some ambitious programmes that will be rolled out eventually.

Those privy to the demonitisation discussion before it was made public on Tuesday hint that next couple of years will see increased spending on armed forces, infrastructure creation and other such activities.

“The plan expenditure of the government did not grow over the last seven years. We will increase it many fold,” he said.

Government leaders are unequivocal in sending out strong message to those hoarding black money. “There will be no relief for those depositing unaccounted money over and above Rs 2.5 lakh. Ham baal ki khaal nikal denege,” the leader warned suggesting strong action if unaccounted wealth was brought into the banking system. “It should be treated as scrap.”

The BJP, too, is also not dismissive about the immediate impact of the decision on impending election, with its leader suggesting that regional parties would be hit the most. “We don’t want to contest costlier election. This will help reduce election expenditure,” one of its office bearer said.