PM Narendra Modi’s biggest move to fight tax evasion can add $45 billion to India’s budget..!!
On Black money crackdown, PM Narendra Modi may reap $45 billion budget gain.
According to Mumbai-based brokerage Edelweiss Securities Ltd., the government’s surprise crack down on high-value currency notes will uncover $45 billion (3 trillion ruppes) in black money, which is cash that’s stashed away to avoid tax. “This money can now get utilized for various economic reforms’ funding,” said Edelweiss analyst Manoj Bahety.
ICICI Securities Primary Dealership Ltd. is predicting the figure at 4.6 trillion rupees.
Major Economists are scrambling to calculate the potential gains from PM Modi’s decision to ban Rs 500 and Rs 1,000 notes.
Major Sectors that will be squeezed are Real estate, Jewelry and Cement.
“As investments drive up the supply capacity of the economy, overall gross domestic product growth is expected to benefit in the long term,” economists including Dharmakirti Joshi at Crisil Ltd., the Indian unit of S&P Global Inc., wrote in a report on Wednesday. “In the short-term, GDP growth may get impacted negatively as the cash based economy feels a crunch and consumption and investment moderates.”
“The good news here is that there could be a considerable drop in interest rates over the course of the next three to six months,” S. Naren, executive director and chief investment officer at ICICI Prudential Asset Management Co. said. “This would mean that many of the projects which were unviable could become viable as the interest rate subsides. Therefore, over the next three years, we expect a boom in the Indian economy backed by capital expenditure cycle, starting 2018.”
All deposits of more than Rs 2.5 lakh made between Nov. 10 – Dec. 30 would be flagged to Income Tax office, which will match details with declared income. Any discrepancies would be treated as tax evasion and the tax amount plus a penalty of 200 percent of tax payable would be levied, Revenue Secretary Hasmukh Adhia told.
source : http://www.financialexpress.com/economy/narendra-modi-may-reap-45-billion-budget-gain-on-black-money-crackdown/