Cover Story : Black & White on Money
Intro: Tracking of unaccounted money in foreign banks can be realistic expectation from the SIT. Creating institutional structure to curb this menace requires a comprehensive and long term approach.
In tune with the aspirations and hopes of the Indian masses, first decision that Modi government took after taking over the reins is of constituting the Special Investigation Team (SIT) on Black Money.
It is clear departure from the position taken by the previous government, after a clear order from the Supreme Court in 2011 while passing a strong interim order on petitions filed by the former Union Law Minister, Ram Jethmalani, and others asked the government to take steps. Corruption and parking of black money in safe heavens abroad have been such emotive issues for Indians for last two years that this historic decision is welcomed by all sections of society. There are lots of expectations on the front of clean governance and good beginning is half done. But the real question is considering the terms of reference of the investigation, and of what can be realistically expected from this SIT.
The mandate of SIT can be broadly divided in two parts. The first is related to investigating the unaccounted money parked by individuals at foreign destinations. SIT is expected to perform reasonably well on this front as it is acting independently of Finance Ministry and reporting directly to the Supreme Court, which was not the case during the UPA regime. Pursuing this objective will definitely help in unveiling the information hidden by the earlier regime. The other includes to prepare a comprehensive action plan, including creation of the institutional structure that will enable the country to fight the battle against unaccounted money. This objective is more daunting in country like India where the line between black and white money is very thin.
First of all we need to understand that at domestic level everything that is controlled and covered under government laws fall under the white money category, while black money constitutes everything that is out of it. In Indian context, the whole concept of black and white money is initiated with introduction of uniform currency and tax laws by the British. Still whole agriculture and allied business is out of government’s tax purview. Do we want to bring all our localised business activities under the bracket of ‘white’ money? There is a lot of talk about the Swiss bank accounts but most of the foreign institutional investments made in Indian markets are nothing but black money made into white. Do we intend to curb that? Large chunk of property dealings are in ‘black’, mainly due to whopping prices and high rates of stamp duties. Are we in a position to address this? Many legal provisions is India does not allow ‘white’ ways of running a business. Are we ready to take on overwhelming reforms in legal sector? Unless the SIT tries to address these social, economic, legal and even to some extent cultural questions associated with forceful integration of traditional Indian practices with ‘westernised’ global market, it is difficult to some out ‘Black’ and ‘White’ on money. The realistic goal at his stage should be the track and suggest ways to get hold of unaccounted money deposited in foreign accounts.