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The colour of money...is black

The colour of money...is black
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First Published: Mon, Jan 24 2011. 08 44 PM IST
Updated: Mon, Jan 24 2011. 08 44 PM IST
Union finance minister Pranab Mukherjee is expected to unveil a strategy to check the problem of black money on Tuesday. Don’t hold your breath, nothing much is likely.
The fact is the government can do little about black money. Once funds flow across jurisdictions, the problems of proving one’s case—be it from an angle of money laundering, narco money or plain looting of national exchequers by crooked politicians—in terms of burden of proof lies on the government making the allegations. This has to be to the satisfaction of the country where money has been siphoned off.
Going by this parameter alone, India’s record is shoddy. In a whole class of cases, from Bofors (where bribe money was alleged to have been spirited off in different countries) to the ongoing investigation in the case of Hasan Ali, the Pune businessman, the government has a big zero to show.
Were the problem one of mere gathering of proof, incompetence in drafting legal requests and poor investigations, matters could be rectified at an administrative level. Posting competent officers, shunting out the deadwood and sprucing up in general would sort out things.
The problem is far more pernicious. One, the government has little will to do something meaningful. Two, the lack of will is most likely due to powerful Indians, especially politicians, being involved in generating and stashing black money. Perhaps this is too cynical. But this is a widespread belief, one that the government is doing little to dispel. In fact, when someone such as Prime Minister Manmohan Singh makes arguments that names of Indians on lists shared by foreign governments cannot be revealed, it only adds to this feeling.
It has been argued that names on such lists can be used to tax them. This is a shameless argument. Some years ago, the government had launched a tax amnesty scheme called the Voluntary Disclosure of Income Scheme (VDIS). This was a slap in the face of all honest taxpayers. At the highest level of income tax, citizens shell out 30% tax. VDIS in one swoop brought tax evaders and other crooks at par with diligent taxpayers. The best that the government seems capable of doing now is to repeat that sordid episode once again.
If it were serious, the government would try and bring systematic tax and other governance reforms that would reduce incentives to generate black money.
Is the government serious about bringing back black money to India? Tell us at views@livemint.com
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First Published: Mon, Jan 24 2011. 08 44 PM IST