Coming clean
The Narendra Modi government seems to have decided to offer a deal to those with undeclared assets abroad
The Narendra Modi government seems to have decided to offer a deal to those with undeclared assets abroad. Finance minister Arun Jaitley has spoken of a compliance window for those who want to come clean.
There are two things that need to happen if such a scheme is to work. One, the window needs to be kept open for only a short period of time. Two, there should be a credible threat to the target audience that a crackdown on money stashed away will follow. These two factors need to work together to create the incentives for money to flow back into India.
Earlier, such amnesty schemes were all about getting money for the government in times of distress. The finance minister claims that he eventually wants to attack the root causes of black money. But that will require more than a compliance window. The government needs to also go after black money held in India. Much of this problem is also deeply linked to the challenge of campaign finance reform.
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