Modi now wants to limit cash transactions at Rs 2 lakh

The Prime Minister Narendra Modi-led Indian government made amendments made to the Finance Bill in which it proposed a cap on cash transaction at Rs 2 lakh.

This move came after Finance Minister Arun Jaitley, in his Budget 2017, had proposed the cap to be Rs 3 lakh with effect from April 1.

However, the Indian Government moved a fresh proposal to cap cash transactions at Rs 2 lakh, in a push to cashless economy.

As the Finance Bill was taken up for consideration in the Lok Sabha, opposition parties like TMC, BJD and RSP protested against the introduction of the amendments to 40 Acts, saying it was being done in the form of "back-door entry".

The objections by the opposition parties were overruled by Speaker Sumitra Mahajan who ruled that the 'incidental provisions' involved in the amendments constitute a 'Money Bill' and therefore can be considered as part of the Finance Bill.

Jaitley, while defending the move to make amendments, invoked first Lok Sabha Speaker G V Mavalankar.

He said if a substantial portion of a bill deals with imposition or abolition of tax, then even if it has other incidental provisions, it still can be introduced as a Money Bill.

"You cannot have a bill which says government will spend Rs 100,000 crore without detailing how it would be spent. You cannot have a bill where you say there will be 5 per cent without specifying what will be the deduction, what will be the power of assessing officer, appeal provision... No tax can be imposed without reference to courts or tribunals.. These are incidental provisions...," Jaitley said.