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| SCOURGE OF THE BLACK MONEY | | | KHUSHWANT S RANIAL | 7/27/2011 12:08:55 AM |
| Black money has shattered the Indian economy and also affected overall growth and development of the nation. In fact ,perhaps realising the gravity of the worsened situation ,very recently ,the president of Indian namely Smt. Pratibha Patil while addressing the concluding ceremony of the celebrations for 150 years of the Income Tax Department ,in New Delhi, also made a strong recommendations for tightening the laws to book the tax evaders .She in her address stated that black money has to be addressed both domestically and through cross border measures adding the efforts to enhance global cooperation need to continue to meet the widening threat.
Black money is that part of the GDP which is beyond the accounted stream of the economy. Various studies put the size of black income in the range of 40-50 percent of the GDP . It may have grown out or converted from the offences like arms trade and drug smuggling, terrorism kickbacks in various private or the public sector deals, hawala transactions, invoice manipulation or simple to say through the tax evasion .But whatever may the cause and origin remain , the denominator is the non payment of the taxes. Although despite conduction of series of the serious studies in reflecting the exact amount of the black money siphoned off through Indian domain as well as hoarded within the country is not known .It is another issue that with every passing day, the people of India have started assessing the impact of their due rights being pocketed by few handful corrupt elements and their demand for getting the black money to be stacked in Swiss banks accounts has been getting louder by the day.
Black money is that part of the income which should be reported to the tax authorities but it is not done so, including the earnings from the illegal activities. It is apprehended that if exposed and taxed, this can generate an additional tax revenue of rupees 7,18,469 crore in the current itself and much more during the subsequent years . If the central government manages any how to recover such a huge amount it would reach at such a stage from where the idea of borrowings would move away and budget expenditure would automatically double than the previous one .The growth and development in the rural areas shall gain momentum automatically .Not only this but also other sectors like agriculture ,industry, various social welfare schemes like employment guarantee schemes and better health facilities will gain attention .Apart chances of liquidating the foreign debt will see a ray of light of the day.
Black money is curse on the account that in addition to the facilitation of criminal and terrorists activities, it inflicts big loss to the legal part of the economy and severely harms the true tax payers. Further, there remains instability in the stock markets and the real estate prices remains continuously escalating beyond check. Right since the year 1991 ,the share of this sector in the GDP has multiplied substantially and so the volume of the black income and money leading to the existence of haves and haves not like societies. The biggest irony is also that most of the black money lies with rich realtors, politicians and bureaucrats and those who are supposed to place a check are themselves the real beneficiaries from different sources and so the purpose of its check gets affected. On the top of it ,offenders use their ill-gotten resources to scuttle the speed of the investigation and derail its progress and direction as well.
In order to curtail the perpetuation of the black money, first of all, there needs strong will power and rich amount of sacrifices to fight this malaise with conviction. Area needs be identified and a strategy evolved to meet the challenges on the war footing .Target the corrupt practices in the reality sector –mother source and the reservoir of the black money. There is a need to ensure time bound and single window clearances for the projects .Applications should be received on the online and decisions taken be made available on the websites alongwith the data on property transactions .Red- tapism should be discouraged at all costs. Also there requires more objectivity and transparency in public procurement and contracting. The government should use available data on the international trade by collecting real time data on the quantities and prices on the exporters and importers separately. The generation of black income can stop if the whole economy gets recorded and subjected to the taxation.
Remember, during the period of recession the world over around three years ago, countries like Germany ,Finland, Norway ,Canada ,Itlay ,U.K, Ireland ,exercising the discretionary powers collected the information about the property assests and money and thereafter seized them to check the imbalance but unfortunately leave whole of the country ,our government has not been able to collect the assets details of the notorious tax evader Hassan Ali which signifies our lack of enforcing will to put the law of land in action vigorously. We must adopt the stringent measures to put burden on the defaulter to prove himself innocent and should give freedom to the investigative agency to explore the truth without fear ,force or pressure .Tax evasion must be made a criminal offence so that money laundering could be cover it .
Those countries which we suppose to be acting as the tax havens should be distanced on their non cooperation to lend valuable information .Apart transactions in cash should be made difficult and the use of the banks and plastic money be encouraged and also there should be ceiling on keeping the amount and transaction made be made difficult. Drive the surplus cash comprising bigger notes out of the market forcing people to rely on the banks. This will lead to shrinking of the black money ,tax collection will improve reducing the issue of counterfeit currency with no black money to be paid .Make the provisions of beam assests tough by introducing a National Property Register that should record all the assets of an individual on the basis of a unique ID to be allowed to be allotted on the fingerprint or on the other unique identity code. Last but not the least, let public be given a chance before adopting firm rules to disclose voluntarily without fear of interrogation or legal complications irrespective of the areas inside the country and outside the nation. But if we persist with uneasy queries then nobody will come forward to disclose anything .
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