The Union finance minister has done well to recognise that the bulk of black money is still within the country. It should be easier to tackle this than chase unaccounted cash held in foreign tax havens. But the government still has to demonstrate its seriousness about tackling black money. It has talked of a PAN declaration for transactions above Rs 1 lakh.
To change the attitude of people and make them use plastic money, with cash being the exception, requires that the government itself begin to make the use of plastic money and online transactions easy. There are no facilities for paying stamp duty, property registration, water tax, electricity tax etc., through plastic. The money of powerful people, whether politicians or bureaucrats, are allegedly parked in the real estate sector — in the housing and commercial buildings segments. Black money in the real estate sector accounts for 11 per cent of GDP.
The government has identified six sectors, including equity markets, bullion and NGOs, but nothing has been done. Political party fund collections are usually cash transactions and though the amount spent on elections by the two major parties, the Congress and BJP, according to the M.C. Joshi Committee amounted to a total of Rs 25,000 crore, the two parties declared just Rs 700 crore.
A lot more work needs to be done by the government if cashless transactions are to become the order to the day. The clean-up would have to start from home.
