Legal questions about demonetisation
There are three important questions of law associated with demonetisation. The demonetisation of Rs. 500 and Rs. 1000 has led to speculation about the amount of currency that will not be deposited or exchanged at all, because of fear of scrutiny by tax authorities. Some suggest that from and out of the notes in circulation, close to 20 per cent may not be exchanged or deposited at all with RBI (see here, here and here). (Others believe this will not happen). The numerical values involved are very large; 20 per cent works out to INR 3 trillion disappearing from circulation.
UPI and its benefits
The Unified Payment Interface (UPI) can be thought of like an email ID for your money. It will be an unique identifier that your bank uses to transfer money and make payments using the IMPS (Immediate Payments Service). IMPS is faster than NEFT and lets you transfer money immediately and unlike NEFT, it works 24×7. This means that the online payments will become much easier without requiring a digital wallet or credit or debit card.
FINALLY WELCOMING A NEW CHAPTER IN INDIAN ECONOMICS, THE “GST”
In a major step towards unified tax system to stimulate the economic activity in India and contribute to the ease of doing business, Indian Parliament recently cleared a landmark tax reform bill, the Goods and Services Tax Bill or GST Bill that will pave the way for a new national sales tax and the creation of a common market across the country for the first time. Under the proposed GST, effective tax rate on goods (comprising around 70-75 per cent of the Consumer Price Index basket) will decline.