How Black is Indian Black Money
How Black is Indian Black Money
I have recently had an encounter with Indian Black Money. I was searching a flat in Bombay. The builder of the very first flat which our family liked most asked us that he will ccept only 60 per cent of the payment by cheques remaining we had to pay in cash. Initially, I do not understood the real meaning but when later I had clear picture of black money creation. If I would have agreed to his proposition, I would have also contributed creation of Rs 40 Lac black money in a single small deal of Rs 1 Crore for the country. When I said I do not have any cash, each and every penny accounted for that too in my Bank Account than broker said 'Sir, do not worry, there are CAs who will help you in getting cash against your cheque payment and also a small earning also. Same story with most of the builders, the deal needs 30 to 40 percent cash. Fortunately, I could find a seller who gracefully accepted the entire payment in cash, thus he saved me in addition of black money for the nation !
So when there are very high pitch political noises demanding to bring black money from Swiss Banks and meek defence of those sitting in government citing international treaties obstructing it, a logical question erupt in my mind that is there is any body serious to stop its generation .
Somebody asked Ram Jethmalani that why he defends obvious bad eggs. His disarming reply was he had to earn enough to afford to represent the virtuous poor. Since this exchange took place at a party and a young lady asked this question, Jethmalani was probably being gallant or facetious, but the true words spoken in jest are a reminder that good, bad, legal, illegal, black and white money are inextricably linked and our system is such and the vested interests are so intense that segregation of these category is difficult. After all politicians have to fight elections, the business man have to run their business and industry, some body has to intimidate his rival, bureaucrats have to enjoy luxuries of life after day's hard work.
We are also mute partners in creation of black money. When we go to a lawyer or a doctor, how many times you did receive any money receipt. After politics, Real Estate is country's most vigorous activity both creates and absorbs black money. Hotels, restaurants, tourism, what are called events and valet parking revolve giddily on cash. The Raja Chelliah Committee recommended milking the flourishing service industry with service tax. According to a very conservative estimate submitted to ASSOCHAM in 1991 on black money noted that parallel economy was 21 per cent of India's gross domestic product . The economy might collapse if black money dried up. Hawala transactions and terrorism funding, as well as Election Budgets would have to find other channels.
ASSOCHAM also recorded that 21 schemes had failed in previous 25 years to bring unaccounted funds into mainstream. Why ? The reasons for black money that the businessmen who fund all parties give high taxes, bureaucratic complicities and stringent control -have gone. Yet more funds are sent abroad now. Again question erupts - why.
Clearly, rich and affluent Indians have little confidence in the country. Perhaps, we are also chronically dishonest. Moral outrage, much of it simulated, and political one up man ship will achieve nothing if that is so. Nor will new laws, if the action on ground remains cosmetic or selective.
Now a time has come for serious introspection. Instead of chasing chimeras or politically motivated witch hunts, we need to focus on realistically on the phenomenon called Black Money. The focus should be why it is created instead of how. If the bureaucrats and their political masters answer it, the problem may be solved. Find out the reasons why the Indians prefer to save or invest abroad. Exploring those would be more rewarding than the Supreme Court's pursuits of the Holy Grail of integrity, Anna Hazare or Self professed Swami Ramdev's bid to edge back into the lime light or the middle class envy or greed that TV crusades exploit.
I remember an instance, Man Mohan Singh as Finance Minister visited Singapore. In his press conference , he passionately spoke on India's financial needs, a German - Swiss journalist stood and told him that there were too many rich Indians with Swiss Accounts for Europeans to think of India as a poor country. Singh might a said a word or two but did not have an answer to it.
New Government should set goal instead of playing to the gallery with farcical 100 days vows. Solution lies in making people feel that India is worth investing in, doing business is not a crime that a business man has to pay from a politician to inspector to a local goon, , a country where Indians choose to retain their money, instead of buying car factories, steel mills in far flung countries. Punitive action may catch some small fishes but the fat cats - who make or unmake policy - will buy their way out until the new Government restore Indian confidence in India.
I have recently had an encounter with Indian Black Money. I was searching a flat in Bombay. The builder of the very first flat which our family liked most asked us that he will ccept only 60 per cent of the payment by cheques remaining we had to pay in cash. Initially, I do not understood the real meaning but when later I had clear picture of black money creation. If I would have agreed to his proposition, I would have also contributed creation of Rs 40 Lac black money in a single small deal of Rs 1 Crore for the country. When I said I do not have any cash, each and every penny accounted for that too in my Bank Account than broker said 'Sir, do not worry, there are CAs who will help you in getting cash against your cheque payment and also a small earning also. Same story with most of the builders, the deal needs 30 to 40 percent cash. Fortunately, I could find a seller who gracefully accepted the entire payment in cash, thus he saved me in addition of black money for the nation !
So when there are very high pitch political noises demanding to bring black money from Swiss Banks and meek defence of those sitting in government citing international treaties obstructing it, a logical question erupt in my mind that is there is any body serious to stop its generation .
Somebody asked Ram Jethmalani that why he defends obvious bad eggs. His disarming reply was he had to earn enough to afford to represent the virtuous poor. Since this exchange took place at a party and a young lady asked this question, Jethmalani was probably being gallant or facetious, but the true words spoken in jest are a reminder that good, bad, legal, illegal, black and white money are inextricably linked and our system is such and the vested interests are so intense that segregation of these category is difficult. After all politicians have to fight elections, the business man have to run their business and industry, some body has to intimidate his rival, bureaucrats have to enjoy luxuries of life after day's hard work.
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We are also mute partners in creation of black money. When we go to a lawyer or a doctor, how many times you did receive any money receipt. After politics, Real Estate is country's most vigorous activity both creates and absorbs black money. Hotels, restaurants, tourism, what are called events and valet parking revolve giddily on cash. The Raja Chelliah Committee recommended milking the flourishing service industry with service tax. According to a very conservative estimate submitted to ASSOCHAM in 1991 on black money noted that parallel economy was 21 per cent of India's gross domestic product . The economy might collapse if black money dried up. Hawala transactions and terrorism funding, as well as Election Budgets would have to find other channels.
ASSOCHAM also recorded that 21 schemes had failed in previous 25 years to bring unaccounted funds into mainstream. Why ? The reasons for black money that the businessmen who fund all parties give high taxes, bureaucratic complicities and stringent control -have gone. Yet more funds are sent abroad now. Again question erupts - why.
Clearly, rich and affluent Indians have little confidence in the country. Perhaps, we are also chronically dishonest. Moral outrage, much of it simulated, and political one up man ship will achieve nothing if that is so. Nor will new laws, if the action on ground remains cosmetic or selective.
Now a time has come for serious introspection. Instead of chasing chimeras or politically motivated witch hunts, we need to focus on realistically on the phenomenon called Black Money. The focus should be why it is created instead of how. If the bureaucrats and their political masters answer it, the problem may be solved. Find out the reasons why the Indians prefer to save or invest abroad. Exploring those would be more rewarding than the Supreme Court's pursuits of the Holy Grail of integrity, Anna Hazare or Self professed Swami Ramdev's bid to edge back into the lime light or the middle class envy or greed that TV crusades exploit.
I remember an instance, Man Mohan Singh as Finance Minister visited Singapore. In his press conference , he passionately spoke on India's financial needs, a German - Swiss journalist stood and told him that there were too many rich Indians with Swiss Accounts for Europeans to think of India as a poor country. Singh might a said a word or two but did not have an answer to it.
New Government should set goal instead of playing to the gallery with farcical 100 days vows. Solution lies in making people feel that India is worth investing in, doing business is not a crime that a business man has to pay from a politician to inspector to a local goon, , a country where Indians choose to retain their money, instead of buying car factories, steel mills in far flung countries. Punitive action may catch some small fishes but the fat cats - who make or unmake policy - will buy their way out until the new Government restore Indian confidence in India.
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