Those who some time back demanded withdrawing the currency note of Rs. 1000 and 500 to curb Black Money have indirectly introduced currency note of the denomination of not only of 5000,10000 but of 50000 in name of KVP.
Earlier this week, Union Finance Minister Hon’le Arun Jaitley launched a Kisan Vikas Patra (KVP) savings certificate with a tenure of eight years and four months to double your money. The KVP has an inherent yield of around 8.5 percent, but its key feature is not its annualized return ( no monthly/quarterly/annually interest payable to the holder ), but its relative anonymity. After the initial know your customer (KYC) documentation, KVPs can be transferred to anyone and repurchased on maturity at any post office. No PAN details are required, which means the taxman will not have access to any information from the post offices where these are going to be sold. Even if you launder money and declare an income from KVPs eight years and four months later, the taxman can’t catch you, since there is a law limiting how far back you can go to reopen tax assessments ( will it not generate huge BLACK MONEY ).
The KVPs, which come in denominations going up to Rs 50,000, are officially intended as a savings avenue for rural areas, as their name suggests, but they will effectively become instruments for the storing and transfer of undeclared cash. The humble kisan can use other post office instruments such as monthly savings schemes and national savings certificates for his savings. What Jaitley has done is create a new Rs 50,000 note for people other than the kisan.
One may ask the so called crusader of black money Baba Ramdev who made a loud cry and accuses the previous govt and demand publicly to ban the currency note of Rs. 500 and 1000 to curb the generation of Black Money. Nation wants an answer from the yoga guru. Let us wait for his reaction and comments.
Dr. J. K. Garg