Poor think rich evade taxes, so supported note ban: Jaitley

inance Minister Arun Jaitley on Wednesday said the poor supported the note ban because of a widespread perception that the rich evaded taxes and this was an effort to redistribute wealth.

Addressing a discussion on election campaign financing on Wednesday, organised by the Nehru Memorial Museum and Library, the FM also disagreed that the PM’s “garib kalyan” programme was similar to Indira Gandhi’s “garibi hatao”. He said the 1971 programme did not envisage increasing productivity and was not in the national interest.

Prime Minister Narendra Modi had, on November 8, announced the demonetisation of the old ~1,000 and ~500 notes. If the Bharatiya Janata Party were to win the Uttar Pradesh Assembly elections, the final phase of voting for which was on Wednesday, the Modi government at the Centre might call it a referendum in favour of demonetisation, said sources.

A favourable result could also embolden the government to take stricter steps against tax evaders.

On the issue of political funding, the FM said the proposal of state funding of elections needed to be debated. The minister suggested he wasn’t convinced such a proposal would find favour with the public.

“It (state funding of elections) is a possible suggestion. But I will add only two caveats. It should not be read that I am critical of it,” he said. “Many are going to question in the long run, given the level of cynicism in public opinion, as to why people should be taxed extra in order to fund political elections.”

Also, the high expenditure by political parties, which includes payment for staff, vehicles, advertisement and even planes and helicopters, would be outside the scope of what the government would provide. “Surely you don’t expect the government to fund parties having aircraft and helicopters. I’m sure if my understanding of India’s public opinion is what it is, there will be a hue and cry if we have that model,” he said.

The FM said this year’s budgetary proposal of introducing electoral bonds was a step forward. The bonds would open for sale a little before every election and donors would be able buy these from scheduled banks and donate to parties. The bearer instruments would be redeemable within three to four weeks of purchase.