Illusion Of Black money
Corruption and black money has become the national problem of India. Whenever a child is born in India, indirectly he becomes a debtor of three thousand rupees of foreign loan. The reason behind this is that India has been running in a large amount of debt taken from foreign countries. It is estimated that near about 24.5 lakh crores rupees is deposited in abroad in the form of black money. This amount is eight times than the debt taken from other countries. In spite of this complicated situation, the government has still not been successful in taking any strict measures against the problem of black money. However the issue of black money is not limited to the overseas debt. But it reflects only one side of the coin. Basically the money which is supposed to be spent for the development of the country is either concealed at an unidentified place or is kept in the lockers of foreign banks.
According to the estimation of the World Bank, every year near about 1000-1600 billion dollars goes beyond the country’s border in the form of black money. This amount is related to various affairs of corruption, crimes and tax dodging. More than half of this money belongs to the developing and poor countries. A ban should be put on the whole world through an international contract for depositing the money in confidential account.
Sources of black money:
Following are the major sources of black money:
1) Reality:
The reality has 11% share in India’s G.D.P. One part of the maximum reality business is out of the tax sphere. This part of money is black money.
2) Gold-Silver:
Most of the time black money is included in large scale investment. In the lockers of Indian Bank, large part of the black money is deposited in the form of gold and silver.
3) Share market:
Black money is a part of investment in share market. In spite of various laws applicable, it is recover the black money. Rather its amount goes on increasing due to the returns obtained on the invested shares.
4) Under invoice:
The transaction bill is treated as invoice and the amount is mentioned on this invoice. But the fact is that the amount mentioned on the invoice is less than the original amount to be paid. The under invoice is a strong medium of tax dodging in the export business.
Tax haven countries:
The countries in which a very less or almost no tax is imposed are called as tax haven countries. In India, large amount of tax is imposed on the people and due to which the Indian citizens keep a large amount of their money in the banks or societies of such tax haven countries. Provisions and laws applicable in such countries enable to keep the information confidential of the people and organization that comes to keep their money in these countries. Due to this, the people interested in tax savings get attracted to these countries. The laws of these countries are not transparent and thus it becomes difficult for the other countries to find the black money of their citizens. The tax haven countries and the black money earners take benefit of this situation. The tax heaven countries include Switzerland, Panama, Bahamas, Monaco, Luxemburg, Bermuda and 70 such countries who preserve black money.
Check on black money:
Following steps should be taken by the government to check on the black money:
1) The government should give tax deduction benefits in all types of reality business by making provision in the tax regulation.
2) The whole gold and silver purchases should be brought under proposed section of goods and services tax.
3) It is not possible for the government to keep and eye on every cash transaction. So it should encourage people to use debit and credit card or such provisions should be made in the law.
Proposed bills for reducing black money transactions:
1) Lokpal bill:
This bill will make it easy to conduct an enquiry against corruption matters of ministers and bureaucrats.
2) Judicial conduct bill:
This bill is related with the enquiry of complaints against the misbehavior of the judges. The objective of this bill is to ensure that the judges behave firmly and in an appropriate manner.
3) Complaint Resolution Bill:
The objective of this bill is to resolve the complaints on time in a decentralized manner.
4) Public procurement bill:
It is a transparent bidding process to regulate any government purchases.
5) Whistleblower protection enhancement act:
According to this bill, the name of the person who discloses improper and illegal activity will be kept confidential and protection will be given to him.
Countries like Germany, Italy and France has relaxed their confidential financial law and has put a pressure on Switzerland government to find out the names of the black money account holders. Due to the pressure of America, the U.B.A bank of Switzerland has provided a list of 17 thousand American citizens who has kept their black money in this bank. The bank has also returned 78 crores dollars to America. England has also made a contract in which the Swiss bank will return the amount of the British account holders. But unfortunately India has not made any attempts to exert any type of pressure on the Swiss government.
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