Opposition parties have been creating a furore about the early budget presentation claiming “a populist” budget, if presented, might swing the sentiments towards the ruling party in the upcoming assembly elections in five states. However, if one has to go by recent media reports, populism does not seem to be the central budget theme.
According to a media outlet, the government is likely to bring down the lower limit on cash transaction requiring PAN details from Rs50,000 to Rs30,000. This means all cash transactions of lower amounts will be “visible.” In simple terms, a person making a cash transaction above the specified limit will have to produce his/her PAN card details.
The report also indicated a possible lowering of the limit on merchant cash transactions requiring PAN card details from the current Rs2 lakh.
Furthermore, the upcoming budget might require a person to produce their Aadhar card details where PAN card is not available, according to the report. It also pointed out additional cash handling charges for cash dealings above a specified threshold might be in the fray.
Although the aforesaid measures, if brought into effect, might give a boost to cashless transactions, it can prove to be a dampener among business communities.
True that such a tiresome effort like demonisation aims at keeping a parallel economy due to black money at bay. The government wants to move the country towards a cashless economy as much as possible. However, the timing is crucial at this point in time.
Such measures might have a negative effect on the general sentiment especially if the budget happens to be presented in the beginning of February (which is most likely the case) coinciding with the commencement of assembly elections in five states—Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur.
Demonetisation was akin to a necessary surgery faced by the common man. It will be interesting to see whether the Union budget would have such pains, albeit with reduced intensity.