Everybody loves black money in India!

Source :SIFY
Last Updated: Mon, Jun 23rd, 2014, 19:03:46hrs
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Everybody loves black money in India!
Whenever an Indian citizen reads reports of black money, he invariably thinks of billions of dollars stashed away in far off Swiss banks.

The truth is that black money is the lifeline of Indian business and probably forms the backbone of the Indian economy.

How many citizens pay bribes to government officials all across India? How many business houses pay bribes to politicians of all governments? Whenever any Indian buys any kind of property, what is the black component and what is the white?

Does the common Indian citizen pay a tax on all the income that he gets? Do small business establishments pay any kind of taxes at all? The truth is that when all of the above is totalled, the number is in billions of billions of dollars and could even be in excess of a trillion a year.

In fact till liberalization happened, it was all swept under the carpet. India was a corrupt country and the black market was a thriving business, but no-one spoke much about it let alone ridding India of it.

Madhu Dandavate, our Finance Minister from 1989-90, was the first to officially put a figure to the amount of black money in India putting it at half of the Union Budget of India. Some saw that as a conservative estimate and put the figure at two times the national budget.

The first person who was officially held for having thousands of crores of Rupees in black money was the stock broker Harshad Mehta. The amount of money he owed to the Income Tax department in one year was in the range of the income tax paid by the entire middle class of India!

It was only P Chidambaram as Finance Minister from 1996-97 who attempted to recover some of that. It was called the Voluntary Disclosure of Income Scheme and lakhs of people decided to avail it and the Government of India mopped up more than Rs 10,000 crore.

It may seem a small sum now, but it was quite large in the 1990s despite being a mere fraction of the amount of black money that can theoretically be recovered.

Of course the Comptroller and Auditor General of India found many loopholes in the scheme and called it a fraud on the genuine tax payers of India, but it was an effort all the same.

How farcical attempts at getting black money had been were shown when it came to light in 2007 that Hasan Ali Khan (a man hardly any common citizen in India had heard of) had tens of thousands of crore Rupees and a report even put his Swiss bank account at $US 8 billion!

One won’t be surprised if India has more black money billionaires than white money billionaires. Add the two and India might just have more billionaires than even America!

The figures have got even larger and larger when the 2G and Coalgate scams were estimated by the CAG in the tune of Rs 1.76 lakh and 2 lakh crores! For decades India talked of lakhpatis and crorepatis.
Well 100 crores = 1 arab. 100 arabs = 1 kharab.

India should talk of arabpatis and kharabpatis now. There is an obscure term neel that means 10 lakh crore. Nobody would have thought that we would ever need such high terms, but the Coalgate scam is one-fifth of a neel!

It is good that the Special Investigative Team is looking into black money stashed away in foreign banks. Switzerland is sharing a list of Indian account holders with India.

It is a very long process. One can’t tell when the money will land in the account of the Government of India.

There is a film called Knock Out (2010) starring Sanjay Dutt, Irfan Khan and Kangana Ranaut in which the government does manage to recover a huge amount of black money from politicians.

It is much easier for the Indian masses to believe that a hero can clobber 20 muscular goondas with his bare hands than that a politician can be parted with his Swiss bank money. The film was a huge disaster.

How much money has been recovered from all the mega scams? Zero.

Then what of the hundreds and thousands of Rupees of black money that exchange the hands of millions of Indians? How can that be recovered?

It sounds a real Mission Impossible because in India, everybody simply loves black money!

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The author is a Bangalore-based journalist and blogger. He blogs here.

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