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Passage
The NDA government’s Black Money Act may have so far managed to scoop up just the surface of the potentially retrievable unaccounted income. But the rhythm to unearth more illegal income seems to have been set. The CBI searches in State-run Bank of Baroda branches for `6,100-crore suspected black money transfer is perhaps the first major and concrete action against the ‘black sheep’ in years. Hopefully, the investigating agency and the special investigation team on black money will take this forward. The one-time compliance window for the declaration of foreign assets and income under the Black Money Act, which closed on September 30, saw just 638 declarations aggregating to `3,770 crore. Union Finance Minister Arun Jaitley was quick to warn those who did not declare unaccounted income to face the “consequences.” The CBI raid comes just a few days after Jaitley’s warning and if his categorical statement that bulk of the black money is within India is anything to go by, more such raids can be expected.
The Act is one of the crucial components of economic reforms announced last year and there’s an urgent need to step up efforts to retrieve stashed income, both within the country and abroad. With investor appetite losing sheen, economic growth slowing down and with India moving nowhere as far as its ease of doing business rank is concerned, the government is in a tight spot to act and now. Stringent norms on undisclosed income imply the country is not a ‘safe haven’ and will strengthen the moral fiber of our society. Importantly, income recovered from such sources is crucial for the government to steer its social programmes and fund public expenditure at a time when the country’s direct and indirect tax collections are below target. The Act can also be used to clean up the mess broiling at our public sector banks that are reeling under severe stressed assets and low recoveries.
Traditionally, stock markets too are often used to circulate black money. Be it via Participatory Notes, which allow investors to invest without having to register themselves, or channeling funds through tax havens like Mauritius or Singapore. While continuing to crack the whip on banks to trace the illicit money flow, the government should also focus on the markets.
According to the passage the Black Money Act is for:
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