Will the govt spell out the reality behind the anti-black money hype?

A year has passed since the ‘historic’ decision of the demonetisation of the high-value currency notes was unveiled by Prime Minister Narendra Modi. The BJP has declared that it would observe the first demonetisation anniversary (November 8) as the “Anti-Black Money Day” across the country. Finance Minister Arun Jaitley has said that “BJP leaders and Union ministers will tour the country and make people aware of the various steps taken by the Modi government to tackle black money.”

So be it. It is time for the Union ministers and the BJP leaders tell the people of the country about the outcome of the Modi government’s measures against black money!

Of course, the biggest step taken by the government, ostensibly to fight black money, was demonetisation. The Prime Minister, in his address to the nation a year ago, had invoked the countrymen and women to support him as he was overnight sending the hoarders of black cash to the doghouse. How much of the black money was in cash — 5 per cent, 10 per cent, 20 per cent or a whopping 50 per cent or even more? The Prime Minister had left it to the imagination of the people. The entire country waited with bated breath to see as to how many of the black-money rich would become beggars overnight!

The BJP leaders must tell the countrymen that the move proved to be a damp squib. As the Reserve Bank of India’s reluctant, rather belated, revelation — under both domestic and international pressure — has made it clear, almost the entire money in circulation at the time of the demonetisation decision, be it black or white, has come back to the system. The Union ministers must tell the people candidly that the hoarders of the black cash outsmarted the government — they converted even their black pile into white, using the ill-thought-out (or, was it well-planned?) loopholes that the post-demonetisation exercise provided.

The BJP leaders must also tell people that the Finance Minister had threatened to take action against all those who submitted huge amounts of cash ( ₹ 2.5 lakh and above) in the dead or minimum-balance-holding Jan Dhan accounts. What action has been taken in the last one year? Well, just two days before the demonetisation anniversary, “sources” in the Income Tax department told PTI that 20,000-odd tax returns have been kept aside for “detailed scrutiny”!The Union ministers must tell people how many more years will the scrutiny take. Will the black money hoarders be sent to jail ever?

Just two days before the demonetisation anniversary, another “inspired” story on anti-black money drive hit the headlines of the newspapers: that the government has cancelled 2.24 lakh suspected shell companies post-demonetisation. Most of these newspapers did not tell the countrymen that the cancellation of shell companies is empty hype – that the black money hoarders create temporary vehicles (read shell companies) to launder their ill-gotten cash and having done that, they abandon the vehicles themselves. These crooks create a new shell company every time they accumulate substantial amount of black cash. So the cancellation of these abandoned shell companies amounts to merely hoodwinking the ill-informed masses.

Will the Union ministers tell the countrymen why a company, which deposited ₹ 2,484 crore post-demonetisation, as the government’s own agencies told us, was allowed to withdraw the entire amount before the scrutiny happened? And same is the story of hundreds of other companies which are sitting pretty after converting their black money into white and withdrawing the entire amount from their respective bank accounts in the last one year. Well, the IT department would now say that it would seize such dubious accounts. But anyway, these accounts are already empty. The Union ministers must answer the question while they tour the country: Is our government machinery there merely to lock the stable door after the horse has bolted?

The Union ministers will also need to tell the people as to why the government has looked the other way when concrete action against the 500-odd prominent Indians who were indicted by the Panama Papers (for hoarding their black money in offshore firms) was mandated. The Panama revelation came in April 2016. More than 18 months have passed. During this period, the Prime Minister of Pakistan was indicted and sacked, many other prominent personalities across the world – after all, the Panama Papers exposed the tax-evaders worldwide – were sent to jail.

But the Indian government, even after 18 months, has only issued the customary notices; it has failed to send even one of them to jail. The government has neither the courage of conviction to give a clean chit to these accused. What message does it send out to those who are parking money abroad illegally? That the war against black money is confined to making noises and issuing notices; that it is a pseudo-war, that those named in the Paradise Papers, unveiled on November 6, for parking money in tax havens should have no reasons to worry; they would also be allowed to go scot-free just as it has happened to those named in Panama Papers 18 months ago.

The Union ministers must also inform the countrymen that though the Finance Ministry had declared as far back as in December 2014 that assessments had been completed in case of 128 out of the 628 Indians (who had held accounts in HSBC Bank In Geneva as revealed by a Le Monde expose), and prosecutions had been launched in 60 cases, but in the last three years, not even one person, out of the 628 of them, has been held to account as per law!

The Union ministers should also use the occasion – the Anti-Black-Money Day – to tell the people how the government has, by a sleight of hand, facilitated the corrupt practice rampant in electoral politics by introducing the provision of the Electoral Bond in the last Budget. The Election Commission had been painstakingly evolving and arguing for concrete measures to make all political donations more and more transparent so that the play of the black money in electoral politics would be minimised.

But the unveiling of the electoral bond, as the then Chief Election Commissioner Nasim Zaidi said to a parliamentary committee, constituted a setback to the transparency provisions; yes, the donors will go through the bank channels but neither the people of the country nor even the Election Commission would now get to know which individual or corporate body paid how much money to which political party!

There will be a cloak of secrecy as even the earlier provision for corporate houses to inform, if not seek sanction of, the investors to make a political contribution has been done away with. The obvious beneficiary will be the ruling party of the day as it would be best placed to offer quid pro quo — licenses, permits et al — that give rise to a black money culture.

The Union ministers must also tell the people that, for public consumption, the government amended the Income Tax Act, 1961 to debar all political parties from receiving donations above ₹ 2,000 by cash (earlier the threshold was ₹ 20,000), but the government has refused to amend the Section 29 (C) of the Representation of the People Act to lower the threshold of donations – from ₹ 20,000 to 2,000 – to be declared to the EC.

So while the government has claimed that, by the IT Act amendment, it curbed the use of black money in politics, it has actually ensured that the hoarders of black money need not worry: they can continue to pay in cash to make a political donation up to ₹20,000 without disclosing identity. It is another smart move to protect the black money culture!

There are many more such narratives; the Union Ministers have much to share with the people of the country — as to how successfully the government has created a make-believe war against black money while going out of the way to protect the kingpins of the black money industry!