Demonetisation: State expects tax loss to a tune of Rs.2000 croretext_fields
Thiruvananthapuram: CPI-M led LDF government in the State Thursday said it fears a tax slump of Rs.2000 crore this month due to slowdown in trade and business in the wake of cash crunch following demonetisation.
Citing some BJP state leaders' statements, the government also said there was a "political conspiracy" to destroy the cooperative sector in the state under cover of demonetisation.
Chief Minister Pinarayi Vijayan criticised the Centre for not allowing primary societies and district cooperative banks to exchange old notes and said there was a "political conspiracy" to wreck the sector.
"Centre's decision has to be viewed in the background of state BJP leaders repeated statement that cooperative sector in the state is storehouse of black money," he said.
Vijayan termed as absurd the allegation of BJP leaders and said there was no unaccounted cash with cooperative sector, functioning as per laws passed by the state assembly.
"There is no bar to conduct legal inspection if there is any black money in cooperative sector. Government is committed to protecting cooperative sector as it is people's area and it deals with money of common man," he said.
He said the state could achieve the status of total banking because of the active functioning of cooperatives in the state. "It is not a centre for black money hoarders to play, but the hard earned money of ordinary people."
Vijayan said Finance Minister Arun Jaitley had given positive response when he met him and explained the situation in the cooperative sector in the state.
Government expected a favourable order from the Centre, but the RBI directive took away the permission of District cooperative banks to carry out the "exchange process" (of defunct notes).
"We suspect a definite political conspiracy behind this," he said, adding BJP leaders in the state were saying cooperative sector was a place to stash black money.
Vijayan was talking to reporters after a cabinet meeting that took stock of the situation in the state against the backdrop of inconvenience faced by people due to withdrawal of Rs.1000 and Rs.500 notes.
He also asked the Centre to pull back from its present move to "choke the cooperative sector" and preserve it as it had grown in the state "step by step and not with the resource of black money hoarders."
Meanwhile, State Finance Minister T M Thomas Issac said government estimated a total reduction in tax collection during the month to a tune of Rs.2000 crore, that is half the target of Rs.4000 crore.