Kerala urges center to form ‘National Demonetisation Impact Relief Fund’

Saturday, Feb 18, 2017,10:28 IST By joji A A A

Thiruvananthapuram | A Committee to study the impact of demonetisation on Kerala’s economy Friday suggested that the Centre constitute a ‘National Demonetisation Impact Relief Fund’ to finance sectors in states badly hit by the note ban.

The Committee head, Prof. C P Chandrasekhar of the Centre for Economic Studies and Planning, suggested that all states conduct a study to assess demonetisation triggered losses and seek compensation from Centre.

“Transfers from the Fund can be used to finance direct benefits to the most severely affected sections of the population’, he said.

The Committee, appointed by the Kerala Planning Board, submitted its final report to Chief Minister Pinarayi Vijayan today.

Planning Board Vice-Chairman V K Ramachandran said 56 per cent of economic activity of Kerala has been affected due to the note ban, pulling the economy down and affecting potential resource mobilisation as well.

The report also estimated an aggregate tax revenue loss of Rs 11,000 crore if GSDP growth plummets to 10-11 per cent.

Chandrasekhar said the coooperative sector was most severely affected and added that Primary Agriculture Cooperative Societies strengthen their institutional basis.

With new technology, PACS and their branches should be connected and networked with commercial banks, he said, adding they should also adhere to KYC compliance, PAN card registration and TDS on deposits.

This would act as a safeguard against intervention of Central agencies, including RBI, in functioning of societies in future, he said referring to RBI not allowing the cooperative sector to exchange old notes.