The finance ministry clarification has cast a shadow on the proposal, especially ahead of state elections in five states including Uttar Pradesh. The proposal was widely expected to be made part of the upcoming budget to be presented on 1 February to disincentivize high-value cash transactions. Niti Aayog chief executive officer Amitabh Kant in December had said that government will make digital transactions cheaper than cash transactions and announcement to the effect may be made in the budget. Andhra Pradesh CM Chandrababu Naidu is heading the chief ministers’ panel that recommended the cash withdrawal tax. Y. Sudhir Kumar Shetty, president, UAE Exchange said though there may be initial resistance towards a tax on higher cash withdrawals, it will bring more people into the tax net.

Source: Mint January 25, 2017 14:38 UTC