The Narendra Modi government can be faulted on not achieving all it had promised in its election manifesto, but it has succeeded quite handsomely in ferreting out unaccounted cash, that was a major pledge. Over 64,000 cash-rich tax defaulters gave the tax department and the government a pre-Diwali bonanza of over Rs 65,000 crore, according to early figures. Their numbers, however, still seem a drop in the ocean of such defaulters, though in the past two years the government has detected unaccounted incomes of little over Rs 56,000 crore. The government had earlier this year sent seven lakh letters to suspected tax evaders, and the numbers that responded are therefore miniscule in comparison.
It just shows the astronomical amount that still must be tapped and it will be extremely interesting to see how the government goes after the lakhs that are still not disclosing their hidden wealth. Finance minister Arun Jaitley has been quite unequivocal in warning of the consequences of not disclosing incomes, and he will certainly get the support of all citizens in his endeavour. It is really amazing that people are still bold enough to refuse to declare their obviously ill-gotten gains. Chasing tax defaulters, however, is just one part of the entire tax-evasion syndrome. The government now needs to, with equal seriousness, tackle the creation of black money.
It knows all the avenues of creation, such as real estate, construction, etc, and the big fish must be handled ruthlessly. But India has lakhs of small traders, small businesses like restaurants, professionals like doctors and lawyers, and consultants who are still not in the net. For example, traders and small restaurants don’t always issue bills unless asked for. It seems a formidable task and the tax department will need an army of sleuths to track this. The government has no alternative but to go ahead and get all the money it can to finance its welfare schemes such as Swachchh Bharat and several others for the poorest of the poor. It has been accused of drastically cutting down on its social welfare spending, including on flagship plans, like the rural employment guarantee scheme.
Also, its dalit upliftment schemes can be more than token, if the crores that are ferreted out can be diverted to finance such schemes. Programmes to empower women, that is a vital necessity, can also be undertaken. It’s also necessary to create entrepreneurs to give employment to the hordes of unemployed. The Modi government has three more years to go, so there is a lot it can achieve if it has the money. If over '65,000 crore were declared by just 64,000 people, one can imagine how much will come from the remaining 6,40,000 people who had got notices.
