dna edit: The colour of money

Getting back money stashed away in overseas headquartered banks requires not just the will of the judiciary but also that of the government. The latter has to make all out efforts to retrieve the money from the tax havens and bring it back into the country.

If the Supreme Court, in its order of July 2011, had asked for such unaccounted monies to be brought back to India, arguing for a recall of that court order only reveals the government’s reluctance to make a positive difference to the lives of the people of India. The involvement of several top-notch business enterprises and politicians in stashing away huge amounts of cash and keeping them in safe custody at overseas banks appears to be behind the government’s reluctance to comply with the court directive. It would appear that the government is deeply resistant to the idea of displeasing corporates who generate employment as well as contribute to India’s GDP. But who else can the apex court depend on other than the government’s investigative agencies to recover that money? The hefty amount, if and when brought back to India, can substantively improve the per capita income in the country.

India’s fiscal deficit for April 2013 to March 2014 period is estimated at Rs5.25 lakh crore or about $86 billion. Contrast this with the Rs70 lakh crore smuggled out of the country and deposited in foreign banks abroad. The government can, therefore, play a crucial role in bringing this money back to where it rightfully belongs. What we are currently witnessing however is exactly the opposite. The Supreme Court has rightly rapped the government for doing ‘nothing’ except file one report and transfer the tax burden on the people. Since 1947, as rightly pointed out by the apex court, the issue never did get the attention it deserved. A major reason for such prolonged hesitation could be in shielding political bigwigs who could be implicated in such undercover transactions.

The government, if it so wants, can stem further flow of funds into foreign accounts, and ensure a proper evaluation of all real estate deals. Investments in gold and land and other sectors, prone to rampant black money deals, should immediately be brought under the government scanner. Since Independence, successive governments have made no attempt to ensure accountability and transparency in business deals.

In fact, if one were to look at residential property deals, the salaried middle-class is known for pulling out legal money and making payments in cash because realty developers demand up to 40 per cent of the transaction cost in cash in order to dodge taxes. Governments across the spectrum have turned a deaf ear to tax reforms. In the meantime, the country has kept churning out unaccounted for opaque deals hurting honest citizens.

This is a unique case where the law of the land is not executed in spirit. This perhaps could be a good time to remedy this state of affairs. With the country gearing for the general elections from April 7 to May 12 and the results coming in on May 16, the bureaucrats at present literally have no ministers to report to. This could be the moment for them to push through measures in compliance with the Supreme Court order. The home secretary, particularly, could take the initiative and write to foreign governments suspected to have banks that nurture such black money accounts.