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Walking The Talk On Black Money

Updated on May 29, 2014

Among Mr.Narendra Modi's poll agenda was the question of unearthing and bringing home the phenomenal amounts of black money stashed away by Indians in tax havens abroad. On its very first day in office, Mr.Modi's government gave its go-ahead for the constitution of a Special Investigation Team(SIT) to carry out investigations for the purpose of unearthing black money. This was not a suo motu action on the part of the new government although the ruling National Democratic Alliance government could hog credit for taking prompt action to fulfill one of its poll promises. The immediacy of the government's action, which could, in any case, have been expected sooner or later, had been necessitated by an order of the Supreme Court. The order had been issued by the Hon'ble court on the eve of demission of charge by the outgoing United Progressive Aliance(UPA) government. The UPA government had fought a losing battle in its bid to stall the court's order on the grounds that it was a case of judicial over-reach; it had claimed that the matter of probing black money came under the purview of the Executive branch and not under Judiciary. The court threw the government's review petition out of the window and said that it was giving the government a final opportunity to implement the former's order and that too within a week's time; no extension of the time limit was admissible. It, thus, became mandatory on the new government to act upon the order immediately.

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SIT To Probe

The SIT has been constituted with Justice M.B.Shah, a retired Supreme Court judge, as Chairman and another former judge of SC, Mr.Arijit Pasayat, as Vice Chairman. The SIT will have several high profile officials from government departments and agencies such as Research and Analysis Wing, Intelligence Bureau, Central Bureau of Investigation; Enforcement Directorate, Central Board of Direct Taxes, Revenue Intelligence, Financial Intelligence and Reserve Bank of India, as members. The SIT has been mandated to probe all cases of black money and not specific ones.

What Is Black Money?

Money neither accounted for nor taxed is black money. How is it generated? Bribery, illegal criminal activities like international arms trade, smuggling, drug peddling etc as well as shady financial dealings where money changes hands without proper receipts or accounts are the sources of black money. Real estate is a sector where huge amounts of unaccounted for money are in circulation.

Very often black money is associated by the common man with humongous sums of money stashed away in foreign banks. In truth, even small amounts of unaccounted for money, like money that changes hands by sale and purchase of goods, commodities and services by individuals in their day-to-day lives without a proper bill or receipt for the purpose of avoidance of VAT, qualify to be called black money.

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How Much Is The Loot?

There are no precise and authentic reports available about the quantum of black money parked by Indian nationals in foreign tax havens. Estimates of black money in Swiss banks alone vary from US$ 2 billion to a mind- boggling US$ 14 trillion. The Swiss Bankers' Assoication and the Government of Switzerland have stated that the black money held by Indian nationals is US$ 2 billion. In February 2012, Director, Central Bureau of Investigation, said that Indian nationals had about US $500 billion in foreign tax havens.

Evil Face Of Black Money

Black money is used to finance evil and immoral acts of terrorism, propping up illegitimate regimes like the one in North Korea, trafficking in human beings, smuggling of drugs and other contraband goods etc. Circulation of black money in the markets is one of the causes of unbridled inflation. Black money is laundered into white money by pumping in vast amounts into film making, real estate etc.

How Black Money Hurts

By failing to stop illegal economic activities and unethical financial dealings thanks to the presence of corrupt elements in political circles and law enforcement agencies or inept governance and maladministration, a government fuels an artificial demand for products, hoarding, non-availability of essential commodities, black marketing, fall in industrial production, soaring inflation, and overall economic stagnation. The rich become richer and the poor poorer. Economic disparity between the rich and the poor becomes more and more acute, giving rise to despair and frustration among vast sections of society. Such a despicable economic situation leads to deterioration of law and order and an overall unhealthy atmosphere harmful for the growth of democracy

Need to Fight Black Money

In the interest of preserving the social and moral fabric of the society, the government should address the issue of black money in all seriousness. The UPA-I and UPA-II governments had miserably failed on this account. In fact, UPA-II even tried to stall the Supreme Court order for the formation of a Special Investigation Team to probe black money, by filing a review petition, during the fag days of its tenure. This has given rise to accusations of culpability on the part of the outgoing government. Mr.Ram Jethmalani, leading jurist and lawyer, who had filed a writ petition in the Supreme Court, seeking the Court's directions to the government to probe black money, has gone on record to voice his grave doubts of inclusion of the names of Mrs. Sonia Gandhi and other senior politicians in the list of persons with huge sums of money held in Swiss banks. It was, in fact, in response to Mr. Jethmalani's writ petition, that the Supreme Court ordered constitution of a Special Investigation Team.

Mr.Modi's Task

The first step in the process of unearthing black money having been taken, Mr. Narendra Modi's government may be expected to get further cracking on the job with equal alacrity as on their first day in office. Apart from getting credit for walking the talk by taking swift action on a key point in its election manifesto, Mr.Modi's government could score political points by exposing corrupt political elements among other criminal elements thriving on black money. Besides, any slackness or failure in this regard on the part of the new government would be seized upon by its detractors who would not think twice before attributing ulterior motives to the inaction. On their part, people expect Mr.Modi and his government to bring about a breath of fresh air and light to the dark, musty corridors of power walked by unscrupulous politicians and anti-nationals hand-in-hand!

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© 2014 Kalyanaraman Raman

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    • Kalpatraman profile image
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      Kalyanaraman Raman 3 years ago from NOIDA

      Mr.Narendra Modi has the grit and tenacity to achieve what is seemingly impossible. He has a vision and determination like no other Indian politician in living memory. We can be hopeful about a positive outcome. Thanks for your comment.

    • MG Singh profile image

      MG Singh 3 years ago from Singapore

      Nice post, but getting black money back is not easy. Good to know about it

    • Kalpatraman profile image
      Author

      Kalyanaraman Raman 3 years ago from NOIDA

      Thank you for your appreciation. While copious volumes could be written on the legal, financial and social aspects of the issue, my hub was a humble attempt to outline the basic attributes of the matter. I am glad you liked it.

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      saisarannaga 3 years ago from Chennai in Tamilnadu, India.

      Simple to understand, yet profound!