With an aim to dig out the cash hoarders, the tax authorities in Karnataka and Andhra Pradesh are conducting a series of raids in the states facing a cash crunch. According to a report in the Times of India, around 30-35 raids have been conducted till now. Meanwhile, the government and RBI are trying to tackle the cash crunch in some states as they have moved to pump funds into the affected states. However, the problem has taken an enormous state in the states of Andhra Pradesh and Telangana, where the large contractors are considered to be the main suspect in hoarding cash by I-T department.
Reports said that these large contractors have been issuing cheques to smaller players, which withdrew money based on the payments received by them, to spend on projects. The large contractors issue these cheques by showing them as a subcontract. As per officials, no work was executed by small contracts that reveal the cash was only being held with no actual pending. The officials have revealed that they are focusing on individuals and large entities that have taken large withdrawals in the past few weeks.
“In some cases, the withdrawals are not justified and they do not tally with the income or spending patterns. We believe that cash is only being held with no actual spending planned in several cases,” TOI quoted a source as saying. Until now, not a very large amount of money has been seized by the officials, but they have assured that the investigation will catch pace in coming days. Reports also revealed that hoarding of Rs 2,000 notes is the main reason behind ATMs running dry in the country.