In November 2017, a year after the Modi government announced the demonetisation of high value currency notes, Anil Bokil of ArthaKranti Prathisthan, the organisation that many believe influenced the government’s decision on DeMo, told Financial Chronicle that the ‘second phase’ of economic revolution would involve introducing Rs 200 bank notes and then removing Rs 500 bank notes from the system altogether.
“After two-to-three years, withdraw the Rs 200 bank notes and print more Rs 100 notes. After five-six years, withdraw the Rs 100 notes. During this period, smooth functioning of digital money transactions in the country would be established,” Bokil had said, claiming he had a radical proposal up his sleeve that could mitigate growing unemployment.
“Our proposal to the government is to convert the existing eight hour work into six hours per shift which will not only address the chronic unemployment in the country but also create a platform for grooming innovative ideas in all sectors of the economy,” Bokil had said.
ArthaKranti Prathisthan outlined a core five-pronged strategy for a successful “economic revolution”:
1) Withdrawal of existing taxation system completely except customs/ import duties. That is all central, state and local government taxes – direct and indirect.
2) Every transaction routed through a bank will attract certain deduction in appropriate percentage as Bank Transaction Tax (BTT), ie, single point tax deducted at source (say 2 per cent). This deduction is to be effected on receiving/credit account only, the deducted amount is to be credited to different government level like central, state and local (say, 0.7, 0.6 and 0.35 per cent respectively), the transacting bank will also have a share (say 0.35 per cent) in the deducted amount as the bank has a key role to perform.
3) Cash transaction will not attract any transaction tax.
4) Withdrawal of high denomination currency (say above Rs 50)
5) Government should make legal provisions to restrict cash transaction upto a certain limit, say Rs 2,000. This means, cash transactions above this limit will not enjoy any legal protection.