Special Feature – 4
A
will to tackle corruption and black money
*PRIYADARSHI
DUTTA
Establishing
a system that ‘eliminates the scope for corruption’ was an important promise made
by the Bharatiya Janata Party in its Election Manifesto, 2014. The methods to
achieve the goal were identified as a) Public Awareness b) Technology based
e-governance c) System-based policy driven government d) rationalization and
simplification of tax regime and e) simplification of the process and
procedures at all levels. Apart from this the party promised i) minimization of
generation of black money ii) tracking down and bringing back black money
stashed in foreign banks and offshore accounts iii) enact new laws and amend
existing laws for the purpose and iv) proactively engage with foreign
governments to obtain information on black money. These parameters are credible
enough to measure the success of the NDA government in the sphere of
eliminating corruption and recovering black money. The government, having completed
its half-life, is about to enter fourth year in office. This makes a good
occasion to assess the performance of the government.
The
previous government was heavily riddled with scams and scandals. A writ
petition had been filed in the Supreme Court by Ram Jethmalani and others in
2009 on unaccounted money from India parked abroad. The Anna Hazare movement
for Lok Pal Bill had put the government on back foot. The UPA government thus
appointed a nine member committee headed by Chairman, Central Board of Direct
Taxes in May 2011 on measures to tackle black money in India and abroad. A
white paper on black money was published exactly after a year in May, 2012. On
July 4, 2011 the Supreme Court gave an order in the Ram Jethmalani & Others
versus Union of India asking, amongst other things, for formation of a Special
Investigation Team (SIT). The UPA government tried to unsuccessfully contest
the idea SIT, managing only to delay it by three years.
The
first decision of the NDA government was constitution of SIT on Black Money on
May 27, 2014 as per the Supreme Court order. It is chaired by of Justice (Retd)
M.B. Shah whereas Justice (Retd) Arijit Pasayat is the vice chairman. Till date
the SIT has submitted six interim reports to the Supreme Court. Most of its
recommendations have been accepted by the government. As per its recommendation,
the government has declared cash transactions above Rs.3 lakh as illegal and
punishable under law. Another proposal, on making holding of cash above Rs.15
lakh or above illegal is under active consideration. According to Justice Pasayat,
Rs.70,000 has been detected in black money since the formation of the SIT,
including Rs.16,000 crore stashed by Indians abroad.
Over
the last three years the NDA has provided a clean government. There has been no
shadow of scams and scandals on the government. The previous government’s
second term was riddled with cases of scams and scandals. Prime Minister
Narendra Modi is not only personally seen as incorruptible, but has kept his
government on tight leash. People have found his declaration ‘Na Khaata
hoon, na khaane deta hoon’ (neither do I take bribe, nor allow others to
take) reassuring.
The
government has taken several legislative, administrative and technological
measures to eliminate corruption and black money. Amongst the legislative
measures the principal ones are formulation a) Black Money (Undisclosed Foreign
Income and Assets) Imposition Act, 2015 b) Benami Transactions (Prohibition)
Amendment Act, 2016 c) Securities Laws (Amendment) Act, 2014 and d) the
Specified Bank Notes (Cessation of Liabilities Act), 2017 etc.
A
total of 648 disclosures involving undisclosed foreign assets worth Rs.4164
crores were made under Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015. Similarly, the Income Disclosure Scheme (IDS) that
was operative between June 1 and September 30, 2016 led to 64275 declarations
with an aggregate of Rs.65250 crores of previously undeclared income.
India
had received a third of its foreign direct investment between 2000 and 2015 via
Mauritius. There was strong suspicion the island route was being used for money
laundering and round tripping of black money into India. Thus May 11, 2016
India renegotiated its three decade old Double Taxation Avoidance Agreement
(DTAA) with Mauritius. The new taxation regime has eliminated the scope for
round tripping of funds.
Though
the idea of direct benefit transfer (DBT) to beneficiaries’ bank accounts was
devised by the previous government, most of the intended beneficiaries did not
possess bank accounts and therefore, the objective of eliminating leakage and
pilferage could not be met. However, the NDA government’s Pradhan Mantri Jan
Dhan Yojana (PMJDY) led to enormous increase in banking cover for the poor.
Till date 28.38 crore bank accounts have been opened under this scheme. This
has made DBT and electronic transfer of funds a reality for the poor unlike
before. The NDA government has pursued the Aadhar Card project with greater
zeal. While the previous government had failed to bring any legislation on the
project, this government brought a strong Aadhar Act, 2016. It is estimated
that the JAM (Jan Dhan-Aadhar-Mobile) trinity will bring complete
accountability in personal transactions.
Demonetization
of Rs.1000 and Rs.500 notes was a major move towards elimination of black money
by the government. It was estimated a major chunk of black money in liquid mode
was stashed in bank notes of these two denominations. A major part of it was
shed or disclosed due to demonetization. However, a complete picture of exact
effect of demonetization on black money can only emerge when an official report
is issued by the government. Prime Minister Modi used demonetization as an
opportunity to promote cashless transactions. The government organized several Digidhan
Mela across India, and out with mobile app BHIM (Bharat Interface for
Money) based on United Payment Interface (UPI).
Electoral
funding lies at the root of political corruption. Bringing transparency in
electoral funding is also at the top of the government’s agenda.
*****
* The writer is an independent researcher and commentator.
Views expressed in the article are author’s personal.