On Black Money Trail

Last night, one of the Hindi channels was reporting from the Interim Report of the SIT on Black Money submitted to the Supreme Court.  The figure quoted, if I remember correctly, was some 527 lakh crores of rupees.  A large proportion of this amount was accumulated in the years 2006 – 2011, the channel said.  The reporter also estimated what could be done with this kind of money.  One of the things said was, again if my memory serves me right, that the whole population of India could be fed with this amount for 24 years.  I have not checked this figure. However, even if it is partially correct, it gives an idea of the scale of deprivation caused to the poor in India by those who stashed the money away.  Does this not amount to causing death by negligence?  Can those responsible, by commission or by omission (those who created the system which allows this loot), ever be excused even if they pay the taxes and penalties?  And where would we be if this money was put to constructive use in India?

And as we debate whether the black money could ever be brought back, it is being generated every second within the country.  Anybody who has anything to do with real estate knows that every transaction has more than fifty percent amount paid in cash.  The government collects taxes only on fifty percent of the amount transacted.  A large portion of the black money generated as a consequence must be lying in bank lockers here and abroad.  The administration knows it, but does nothing about it.  I think that there is rule that if the price of any property stated in the return of Income Tax is much below the market value, the property can be acquired by the Government.  How many properties have been so acquired?  Almost nil. 

Another important source of black money is the retail business.  If you buy something, the shopkeeper is able to persuade you not to demand a receipt because you will have to pay taxes.  Aren’t we all complicit in this fraud on the nation?  Again, the administration knows this state of affairs but does nothing.  Why can it not be made compulsory, by amending the Weights and Measures Act, that the receipt must be issued for every transaction, however small the amount involved, and the receipt must state the kind and amount of taxes paid/to be paid by the parties to the transaction?  The organized retail stores and other businesses issue such receipts routinely.  The radio taxis, for example, have started issuing receipts at the end of your journey stating the taxes paid.  On this one score, at least, I believe that organized businesses should be preferred over the unorganized businesses, particularly retail.   

These two reforms can give a huge body blow to the creation of black money.  Can the government proclaiming “ na khaunga, na khane doonga” bring about these reforms?  Let us hope, wait and see.