Dinesh Kamath's Editorial 'War against Black Money' that was published in Newsband

War against Black Money

It is good that the Centre is trying to mop up black money from the economy. The taxpayers were allowed to declare undisclosed past income by paying tax on it at an effective, slightly high rate. This yielded positive dividend. This has boosted the image of Prime Minister and the Finance Ministry.

 The tax department is aware that the positive dividend yielded is just the tip of the iceberg — it had sent seven lakh letters to suspected evaders based on information about huge amount of transactions.

If the Centre is serious about attacking India’s thriving black economy, it needs to be bold. Unless stringent laws for tax evading, transparent political funding, and cashless transaction will not take place the menace of black money will continue to haunt the economy.

However, it’s heartening to see progress made in unearthing black money by the Central Government. But it will need to sustain the improvements. 

We all know that tax evasion is one of the biggest cause of increment in black money but very few of us know about the disclosure of such incomes which is essential at the time of tax payment. So, it should be the first duty of tax department to spread awareness among every citizen about the transparency in tax payment. If there will be transparency in tax payment then only our country will be a prosperous country. "Tax less, collect more and spare no evader'' should be the guiding principles in our taxation policy.

The Government must be cautious not to give the message that tax evaders will be given the opportunity to launder their black money at regular intervals. This will demoralise genuine tax-payers. The best way to root out this evil is to introduce e-rupee at the earliest.

After the 2014 phasing out of Currency notes printed before 2005, the RBI must initiate Demonetization of Rs 1000 and Rs 500 Notes. To track large Benami transaction in names of Drivers and Maids of Black Money hoarders, the Currency Note serial numbers must be recorded where possible, to link them to Benami Accounts also submitting sequential notes. Data Mining tools could help in a large measure. New Notes must have BarCoded serial numbering, to capture its travel through a digital economy.

India is one of the country where unorganised business units are more. Many retailers / self-employed are reluctant to disclose their income since they might lose their profits. There are many benefits such as bank loan if we disclose our income and maintain current account properly. They don't need to be depend on filthy lenders.

Unfortunately, only wealthy businessmen have knowledge about various government aids. The government should educate people about importance of IT and benefits of IT. The current opinion that only honest tax payers and salaried class are used by the government to get more and more tax revenue and not the really tax evaders has to be changed by proper vigilance against corruption.

Though the efforts of the government might have yielded positive results and much money might have been recovered, there may be much more still left to be recovered, especially from big corporates and black- marketeers who have evaded tax for years. The defaulters’ bank money is huge and needs to be recovered to reduce NPAs. A lot remains to be done in coming months and years.