Tag: black money

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.

Black money in Swiss banks

Wikileaks has made public the names of Indians who have black money in Swiss banks and LGT Bank, Liechtenstein. There are main accounts and sub accounts. Nira Radia has 289990 crore rupees. If she is not an Indian citizen she cannot be prosecuted.

Some account holders are businessmen. Naresh Goyal, Harshad Mehta and Ketan Parekh are mentioned. Politicians include Rajiv Gandhi (19800 crore rupees), Sharad Pawar, Karunanidhi, Stalin, Chidambaram, A. Raja, Suresh Kalmadi, Laloo Prasad Yadav, H. D. Kumaraswamy and Jyotiraditya Scindia. Rajiv Gandhi died in 1991. Who operated his accounts after that is not mentioned.

TV channels did not report the event. The channels had devoted lot of time for diplomatic cables. Even if they gave prominence to Anna Hazare’s fast for Lokpal Bill it defies comprehension that they did not even mention about account holders. Some months back Times Now was eager to reveal the names when they became public but was quiet when names became known. May be the owners of TV channels have black money in Swiss banks. May be politicians and businessmen have used all means to silence the media.

As per The Sunday Express report dt. 7/8/2011 France had given to India list of 700 HSBC accounts in Geneva, Switzerland. Names of account holders have not been made public.

By this time all money could have disappeared from those accounts and moved to other places like Cayman Islands, Mauritius and Singapore. Rudolf Elmer had given the names to Julian Assange in January 2011. Switzerland will not give details of past accounts.

Since the account holders are in power or have access to people in power it is tough to prosecute them. It will be possible to prosecute them once they are out of power or have no access to people in power.

Budget 2011

Finance Minister Pranab Mukherjee presented India’s budget for 2011 on 28/2/2011.  He began reading the budget at 11.00 a.m.  Within half an hour many MPs were seen dozing and some yawning.  At 12.25 p.m. Speaker Meira Kumar was seen dozing.  Veerappa Moily and Veerbhadra Singh were sitting behind Pranab Mukherjee.  Veerappa Moily kept himself awake.  Veerbhadra Singh dozed sometimes.

The budget had a proposal of cash subsidies for kerosene and fertilizers.  Subsidies should be abolished.  Changing their form will create other problems.

We don’t need FDI in equity market.

Co-operative societies that have lost money due to non-payment of loans by handloom weavers should be allowed to go bankrupt.  No need to give money to societies.  This will encourage more borrowers to default.

NABARD should manage with what it has.  No need to give more money to it.

Pranab Mukherjee talked about the strategy to fight black money and talked of state funding of elections.  There should not be state funding of elections.  Candidates or parties should spend their money.  State funding of elections will not put an end to black money even in elections.  Corruption by politicians is one part of black money.  There is corruption by non-politicians.  There are corrupt bureaucrats, judges, policemen, tax officials and many others.  Ex-CJI K. G. Balakrishnan’s brother and sons-in-law have assets disproportionate to their income.  Mani Shankar Aiyar said he was offered 35 crore rupees.  He should tell the names of all who offered him money.  Suitable punishment is required to tackle corruption.  Punishment should be proportionate to the amount and for large amounts there should be death penalty.

Preferential treatment of SCs/STs should end.  Reservations meant for 10 years have continued for 60 years with more categories getting them and even more categories demanding them.

Educational Institutions of higher learning should stand on their own feet.  They should collect necessary amount through fees.  Universities, IITs and Delhi School of Economics should not be funded by government.

Money should not be part of any award by government.  Rabindranath Tagore Award for promotion of universal brotherhood should not have cash component of one crore rupees.

Backward Region Development Fund should be scrapped.  There will be competition for being a backward region as there is a competition for being OBC.

The cost of maintaining judiciary should be recovered from litigants in civil and criminal matters.  When a civil case is filed the litigant should pay the approximate cost of the trial including salaries of the judges, cost of maintaining court premises etc.  In criminal matters if someone is found guilty and appeals, the appellant should pay the cost of the trial.  Frivolous litigants should pay a heavy fine.

Revenue deficit and fiscal deficit should be zero.

Government borrowing should be zero.  When the government borrows 3.4 lakh crore rupees it is a serious problem.

It is good to have more warehouses so that food grains do not rot in the open.  Till then excess stock should not be bought.

There should be an evaluation of money spent on scientific research and results.  If the results are not commensurate with the amount spent funding of scientific research should stop.

Government should not finance art.

There should be one category for Income Tax exemption.  Pranab Mukherjee has done well to raise exemption limit to general category i.e., men who are not senior citizens, from Rs.1,60,000 to Rs.1,80,000 while keeping the limit of Rs.1,95,000 for women.  It is a half measure to end sexual discrimination against men.  Reducing age of senior citizens from 65 to 60 and raising their exemption to Rs.2,50,000 from Rs.2,40,000 and creating very senior citizen category of people who are 80 years old and granting them tax exemption upto Rs.5,00,000 should have been avoided.  Senior citizens have been given many privileges over the years.  Senior citizens have been given many privileges over the years.  They don’t even have to stand in queue.  I go to pay electricity bill and in queue for 1 hour and 15 minutes.  Behind me are people who have been in queue and will have to wait for a long time to get their turn.  Suddenly three people appear at the counter and say they are senior citizens.  Such exemptions should be done away with.

During the day Sensex went up by more than 500 points and then came down and closed the day 122 points higher than previous closing.

In the evening Pranab Mukherjee was on NDTV 24X7, CNN-IBN and Headlines Today.