2 Nov 2014

Black Money : Is it Really BLACK !!

The usual uproar from the man in saffron and the people in BROOMS have tried to intensify the topic in recent years but the steps taken up by the apex court have stamped its due significance.

Indian-Black-Money-CorruptionAlthough the government have tried to sensualise the matter by disclosing names in instalments but the stern action by the court can be seen in the form of ‘active –judicial activism’ in a surplus-majoritarian political arena.

The concept of black money can be defined in more lucid manner as a means to hide what you want not to hide. The idea of hiding money may be economical and an edge on break –even analysis but the newly established policy under double avoidance clearly shows a decisive way of tax evasion.

It would be absurd to think that money have been kept in a shelf for years  generating fixed deposit interest so as to make its use at due time because a micro analysis of this vicious pattern clearly reflects the transformation of various channels contained in ‘ white machineries and institutions’. The process of whitening money may takes some time but the immediate effect is seen when an individual or a firm invest in more erratic manner violating the general principle of market and commerce.  Money going through HAWALA stays in the shelf for 1-2 years, earns profit and thus making it matured enough to be invested again in parent country in form of HOT MONEY, FDI and FII.

Indian-Black-Money-Corruption

The purpose of international information sharing have always advocated the enlarged panorama of a global village ,so it’s natural to see Swiss bank making pseudo policy on account holders not disclosing names public static its own policy of bank. When it comes on Indian account holders it becomes more incognigable by the turned FERA INTO FEMA. Earlier the provision under FERA explains these activities under criminal activities but the new law shadows its core definition by terming it as a ‘civil violation’.  Also the Swiss law pertained to this issue behaves in consonance with the Indian FEMA.

Now prime question comes about taking information under democratic formal framework between nations .It becomes obvious and natural to thank a German spy taking data from the bank and distributing it among concerned nations. So governments pro argument relating GAAR act seems fallible and immature.

Indian-Black-Money-Corruption

Now the constructive part of the issue can be interpreted in terms of investigating the matter under SIT, make the names disclosed in procedural manner and convict the accused.  Various ways by which the culprit can have fencing the bars in terms of saying that he/she is an NRI OR any government can’t charge dual taxation on the same amount. Counter argument can place them miserably by stating articles under hiding information ,making money by unfair means and companies act -2103.Bringing back the stashed money may be a difficult process but a strong ‘determination’ not law, will prove apprehensive, considering  the govt compliance of making balance between international treaties and national interest.

What is your view on government's position on bringing back black money?

(Written by Praveen Kumar, an IAS aspirant and ex-Infoscion)

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