The latest effort by the Narendra Modi government to dig out domestic black money is unlikely to produce better results than the one last year to bring back undisclosed assets stashed abroad. The government got just Rs 2,428.40 crore in taxes from 644 Indians who parked their tax-evaded funds overseas. This isn’t even the proverbial drop in the ocean, given that an estimated $2 trillion is stashed abroad. But the government has to keep trying, as Prime Minister Modi had declared it his mission to get every paisa stashed abroad back to India.
The Opposition never stops needling the PM over his campaign promise to put Rs 15 lakhs in everyone’s bank account, but Mr Modi cannot be accused of not trying. Every government before Mr Modi’s has been trying to get black money back into the nation’s coffers, but even if political will exists, there is a lot of dithering at the ground level. Little is known about the outcome of account holders’ names given to the government by France and Germany. It’s hard to tell if there is sabotage or just plain inefficiency.
In the latest scheme announced by finance minister Arun Jaitley in the Budget, the one-time compliance window (of four months) coming into force from June 1 won’t hurt tax evaders. Besides the normal 30 per cent tax, they will pay 25 per cent as cess on taxable income and a penalty of 25 per cent on taxes payable, that comes to just 45 per cent. This is far less than what they would have made over the years investing this tax-evaded amount in real estate or gold. The main issue is continued generation of black money: unless this is curbed, all these schemes are akin to applying Band Aid to a bleeding vein.
In 2012, for instance, the then government formed a panel under the CBDT chief that recommended ways to curb and unearth black money, but little seems to have happened, and the Narendra Modi government too appears overwhelmed by this issue. There is also the fact that corruption, the biggest generator of black money, still prevails, and the PM has done little about it. He may have curbed corruption at the Centre to a limited extent, but it is still rampant at the lower levels and in BJP-ruled states like Maharashtra. It is difficult to believe he is not aware of this.
His government has winked at corruption-related issues even when these were specifically pointed out. There are powerful individuals, for instance, like some politicians and bureaucrats involved in real estate where they park their unearned income. It may be time for the PM to do some out-of-the-box thinking on ways to tackle this Herculean problem.
