Voice from the Rooftop

Blog of Vincent Augustine D'Souza

Getting back black money

There is a debate on how to get back black money held abroad by Indians. Some want it to be declared a national asset. Some say it is red money acquired through crimes like drug trade. Some say there is more black money in India than abroad. The amount of black money is a conjecture. Some mention 25 lakh crore rupees. BJP blames Congress for not doing enough to get back black money and wants the names of 782 account holders given by France revealed. Congress blames BJP that it did nothing when it was in power. Some say getting money is more important than knowing names.

A person who has earned money legitimately should be free to keep it in bank in India or abroad. India allows Non-Resident External accounts. Trusts and NGOs can receive foreign money. Many foreign account holders have RBI permission which should not be a requisite for keeping money abroad. Getting money and knowing names are equally important and it is not an either or situation.

There is a simple way to get back black money held abroad. The finance minister of India should make a declaration. “We want rupee to equal American dollar in 50 days, euro in 70 days, British pound in 80 days, Kuwaiti dinar in 170 days and thereafter remain the strongest currency in the world. To achieve this we will sell one billion or more dollars per day. On Mondays we will sell two billion dollars or more.” This will scare people who have black money abroad and they will get back the money through various ways. With 300 billion dollars in foreign exchange reserves selling one billion dollars per day is not a problem. Petrol prices and inflation will come down.

The government may consider amnesty to people who have black money abroad like voluntary disclosure schemes for Income Tax evaders we had in the past.

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