Open Forum
New Delhi, 1 September 2016
Ban On
Big Cash Deals
VITAL TO
CURB BLACK MONEY
By Dhurjati
Mukherjee
How soon the Government will act on
the proposal to have a complete ban on cash transactions above Rs 3 lakhs and a
cap of Rs 15 lakh on an individual’s cash holding, is doing the round in
business circles. While the Finance Ministry appears to be in its favour, early
acceptance and implementation is critical to move forward on curbing black
money.
Recall, the Special Investigation Team
or SIT, constituted way back in 2014, to look into ways to check generation of
black money and bring the bucks stashed overseas, had in July end made the
above proposal. It also suggested amending the Black Money (Undisclosed Foreign
Income and Assets) and Imposition of Tax Act 2015 by incorporating the
provision that “undisclosed foreign income and assets would vest in the Union
of India”. Earlier, in the budget for 2015-16, the Government had announced
making it mandatory to quote PAN for all sale and purchase of goods and
services where payment exceeds Rs 1 lakh.
Apart from this the recent
disclosure in the Panama Papers investigation, the panel stated that unless
there was a deterrent provision, it would be difficult to bring back the money
stashed outside the country. Some of the tax payers named claimed that they had
obtained permission from the RBI before depositing the amount in foreign
countries.
There was a general perception that
limits on cash transaction would discourage white-collar criminals or the
hardened ones from money laundering and dealing in unaccounted black money.
While the Government has not commented on the report submitted before the apex
court, it is understood that the measures outlined by it may be accepted.
Meanwhile, Finance Minister Arun
Jaitley announced recently that Rs 22,475 crores undisclosed income has been
detected from over 9000 surveys conducted by the income tax department. As part
of the enforcement measures the department conducted searches in 990 groups of
assesses during the last two years and seized Rs 1474 crores. This was much
higher than the previous two years.
Jaitley also stated in the monsoon
session of Parliament that measures taken have equipped the Government better
in curbing the menace of black money. Further, sustained and prompt action
taken by the income tax department in various cases has helped in unearthing
substantial amounts of undisclosed income.
However, while measures taken in the
country have been appreciable, unearthing overseas money has not yet shown any
positive result, which the NDA Government had promised at the time of assuming
office. This obviously happens to be the biggest point of unearthing black
money.
In another statement, Union Revenue Secretary
Hasmukh Adhia, informed recently that the Income Tax department unearthed
undisclosed income of Rs 43,000 crores through investigations in the last two
fiscal years. “While Rs. 21,000 crores has been found from department's
searches, the balance of Rs. 22,000 crores has been disclosed from various
surveys,” he noted at a media conference.
The revenue chief further pointed
out there are close to 5.4 crore taxpayers, of which 150,000 have annual income
of over Rs. 50 lakh. As many as 1.8 crore are TDS taxpayers. On new taxpayers,
he stated: “Out of our projected target of having a new taxpayer base of 1.3
crore, 90 lakh have already come within our fold and we have already garnered
additional revenue of Rs. 10,000 crore from them during the past two years”,
the money belonging to individuals or corporate houses.
This is nothing compared to the
estimate of CMS chairman N Bhaskara Rao, who found that unaccounted money may
account for over one-third of the total Rs 30,000 crores expected to be spent
during the past polls. Though in 2011, the Centre commissioned an in-depth
study to quantify unaccounted income and wealth stashed within and outside the
country to be carried out by the National Council for Applied Economic Research
(NCAER) and the National Institute of Financial Management (NIFM), it is not
known whether any quantification has been carried out of unaccounted black money.
While efforts of the Government are,
no doubt, laudable, it appears that more attempts are needed in the system to
crack the big fishes operating with political patronage. Let us the take the
case of major political parties whose 70 per cent donations and/or funds
collected are from unknown sources, i.e. in income tax parlance termed as black
money. The Delhi High Court bench of Justices S Murlidhar and Vibhu Bakhru
called the case -- of the refusal of the Congress party to submit any audited
account or declare who had made unknown contributions – “symbolic of the
general lack of transparency and accountability of political parties in this
country”. It aptly further observed that parties which fail to maintain audited
books of account of voluntary contributions in excess of Rs 10,000 would be
liable to be taxed for such donations.
This clearly reveals the lack of
political will to ensure transparency in the system. There is lot of talk by political leaders,
businessmen and bureaucrats on transparency and accountability but very little
action is visible. One cannot deny the fact that India’s black economy is parallel
to the real economy but successive governments have done precious little in
acting tough.
Though this Government has shown
some initiative, a well-known political analyst told this writer that it is not
doing enough as it’s afraid of catching the big corporate houses which finance
the big political parties. The fraud on banks and its rising NPAs is another
example of how the rich and the powerful use public money for their own
interest and also do not return the same. If this is the real situation, how
will black money be unearthed?
All are aware that the black economy
is depriving the country of resources for its development programmes, thereby
failing to improve the conditions of the poor and the impoverished sections of
society to the desired extent. At such a crucial juncture, if a few lakh crores
could be unearthed within two years or so, valuable physical and social
infrastructure needed for faster development of the country could be provided.
The NDA Government’s pledge has to
be translated into reality and all attempts to at least bring 30 per cent of
money hidden in overseas banks in to the country are crucial. If it is
successful, then it could hope of its tenure being written in golden letters in
the pages of Indian history. --- INFA
(Copyright,
India News & Feature Alliance)
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