An unprecedented interview by the sitting Prime Minister to a private news channel invoked obvious responses. Besides the people who really wanted to analyse the report card presented by the Prime Minister, there were two types of people who reacted sharply on the interview. First category was the ‘news-lookers’ who wanted to dissect what message was conveyed to whom while the other was ‘grapes are soar’ category who preferred attacking the very intent of the interview. In the race for this newsy struggle, the real message given to the people was missed out. Besides articulating views on foreign policy, flagship programmes and nature of ‘obstructionist’ politics, a significant note was delivered on the economic front where employability and curbing generation and parking of black money were underlined as the key factors.
While replying on the question of misuse of law by some defaulters, ‘I take this as an opportunity and I will show them what the law is’ was the stern message while showing the confidence in the common people of Bharat who believe that ‘if there’s someone who can do this, it is Narendra Modi and he will do it’. If we analyse the answers related to black money in tandem with the reformation in tax regime and opening up of a compliance window for black money disclosures, then we get the larger picture.
The present government has adopted the two-pronged approach on the black money issue—the first deals with the overseas dimensions of black money while the second is on tackling domestic black money.
The popular perception, as the Prime Minister said, is ‘who steal money park their money overseas’, which is estimated around $ 2 trillion. Through constituting the SIT within two-and-a-half days of forming the government the intentions were made pretty clear. Besides raising the issue at the international level to renegotiate the regimes, a major decision was taken recently when the government reached an understanding with Mauritius and tightened the provisions of agreement on avoiding double taxation. This will curb heavy investment in share markets made via Mauritius to avoid tax in Bharat. This may not be sufficient to stop complete stashing of black money abroad but certainly a beginning to create effective control regimes in battling with the long and complicated problem
Domestically, promoting transparency and bringing tax-payers friendly environment is the real challenge. By bringing cash transactions under tax net and cleansing the jewellery bullion market by bringing it under tax bracket, government has already taken major initiatives. Investment in Prevention of Money-laundering Act and introduction of comprehensive Benami Transactions (Prohibition) Bill are also key measures. The results of these measures are visible at the macro level. Cash flow transactions have increased and the government has unearthed tax evasion of around Rs 50,000 crore of indirect taxes and undisclosed income of Rs 21,000 crore through a series of measures in the past two years, at which some people would like to turn a blind eye.
The key management principle is ‘people use corrupt means only when system allows to do so,’ but the system is also made up of people who tend to be corrupt. To break this vicious circle top down approach with conviction of transforming the system along with individuals is crucial. Every one of us has inevitably become a part of this black money spinning system, which makes the combating unaccounted money and tax evasion a gigantic tax. Now when the government is showing the will and intent to uproot the menace, the responsibility of citizens to nurture the mindset of proud tax payers is also essential. Of course, government has to ensure quality of governance against that. Maybe, the electoral reforms and option of conducting simultaneous elections can hold the key to the cleansing up of the system, as discussed in the interview. As a democracy, we need to pursue, deliberate and if necessary, pressurise to realise such proposals. Then only the eyes of naysayers will open.