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EC limit on cash transactions has traders squirming

Several trade bodies in the state are trying to find a way out of the Election Commission rule to seize any unaccounted cash over Rs 2.5 lakh in the run up to the December polls.

Written by Express News Service | Ahmedabad/rajkot/surat | Published: October 20, 2012 2:24 am

Several trade bodies in the state are trying to find a way out of the Election Commission rule to seize any unaccounted cash over Rs 2.5 lakh in the run up to the December polls.

While north Gujarat traders led by the spice dealers of Unjha plan to meet chief electoral officer Anita Karwal in this regard on Saturday,the Rajkot Gold Dealers’ Association called a meeting on Friday under the aegis of Rajkot Chamber of Commerce and Industry,which was also attended by builder associations.

Meanwhile,a delegation of two businessmen from south Gujarat met a top EC official today and claimed that the Chief Election Commissioner will come to Surat on October 29 over the issue.

Merchants at Unjha — world’s biggest cumin market — say that even if a farmer sells 50 sacks of cumin,he would get Rs 3 lakh and because they are not very well versed with the banking system,they prefer to carry cash with them.

Large-scale cash transactions at Rajkot Soni Bazar,which is one of the biggest in India after Mumbai,have been affected badly with this election rule. “For buying or selling gold,we deal in cash. By the time shutter gets down in the evening,when banks are closed,often dealers have to carry cash amount for the day to home. And this amount runs into several lakhs. The EC rule has crippled dealers,” said Bhaya Saholia,president,Rajkot Gold Dealers Association.

Traders argue that there is no clear guideline that once seized,when can they get the cash back after showing the necessary documents. Besides,after the seizure,the EC hands the matter to the Income Tax department. “Now we get income tax survey even for small amounts like Rs 5 to 6 lakh. This is taxing a lot to the industry and market,” said a dealer.

Ahmedabad APMC chairman and BJP MLA Babu Jamnadas Patel said they are requesting the Commission to increase the limit from Rs 2.5 lakh to Rs 10 lakh.

Surat Diamond Association (SDA) president Dinesh Navadia and past president of Southern Gujarat Chamber of Commerce and Industry (SGCCI) Rohit Mehta,met the Director General of Expenditure Monitoring division of the EC,P K Das,to represent the issue.

“Our meeting was positive and we hope something positive would turn up in the coming days. We have got confirmation that Chief Election Commissioner V S Sampath will visit Surat on October 29 and he will see the situation. EC officials told us that the Commission’s intention is not to harass people or businessmen,” Mehta said.

The rule has put the diamond industry in a spot as its entire cash transaction is done through local courier firms (angadias),like giving salaries and and bonuses for Diwali to labourers.

The Surat Diamond Association and Gems and Jewellery Export Promotion Council had made representations to the district collector a few days ago to give certain relaxations till Diwali.

Static teams of the EC have seized Rs 80.91 lakh cash in transit from Surat alone since the announcement of election dates. This money is now with the income tax department for further investigations.

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