Kejriwal lifts the lid on black money

Black money is back in the news again.

But there is also a danger of anti-black money activism turning into a political slogan.

But the latest salvo of Arvind Kejriwal against the Government has led many – especially the middle class – to sit up and take notice.

Critics would rubbish his allegations, stating that he is simply harbouring political ambitions and using black money issues as a ladder.

Be that as it may, the point Kejriwal is raising is very interesting. His team has alleged that Indian Government seems to be more interested in helping the guilty rather than punishing them.

At a time when the US and UK Governments are going all out to get details of unaccounted monies stashed by their citizens in offshore accounts, why is the Indian Government not doing the same?

This question flagged by Kejriwal is also uppermost in the minds of several Indians.

WHOSE MONEY IS IT ANYWAY?

Black money of Indians lying abroad is money belonging to the country, so why is the Government not interested in getting this money back, questioned a representative of India’s largest opposition party — soon after Kejriwal’s latest salvo.

Of course, while in power, the same party did very little to trace unaccounted black money.

But tucked deep inside one of the Parliament questions tabled in the recent monsoon session is an answer that would come as a shocker to many.

It goes like this – the Government has no proposal to declare black money as a national asset.

Here is another gem. In a reply to another question on black money, the minister concerned said there is no provision under the direct tax laws to bring back the money deposited in foreign accounts by Indian nationals.

At the most what can be done is obtain information from foreign countries and get it investigated so that the untaxed amount can be taxed.

Simply put, there is no commitment or intent to bring to tax any unaccounted monies – an allegation of Kejriwal.

While most hapless salary earners discharge their TDS obligations without murmur, there are hundreds who enjoy protection of Government for their undeclared accounts abroad.

HSBC, GENEVA

Kejriwal’s latest expose of naming the 10 individuals/companies with bank accounts in HSBC, Geneva has turned the spotlight on the Government.

He says these names – which included some leading industrialists – are part of the list of 700 people having bank accounts in HSBC, Geneva and that the list was handed out to Indian Government by the French Government in July 2011.

He also wants the Government to make public the names of 700 people in the list and initiate action against them.

The Government has promptly pointed out that information received from the French Government was covered under the “confidentiality clause” in the double taxation avoidance agreement between the two countries and can be used only for the tax purposes specified therein.

In other words, the Government can’t make the names public.

Kejriwal may have to rely on his network in the Income-Tax Department to bring out the truth.

So what has the Government done so far on the information provided by the French Government?

Again the reply to a Parliament question is revealing.

In the recently concluded monsoon session, the Government told Parliament that some persons have paid taxes amounting to Rs 181 crore as on March 2012.

“Investigations conducted on the basis of information received from the Government of France about deposits of Indians abroad have led to detection of undisclosed income of Rs 565 crore.

“Taxes amounting to Rs 181 crore have already been realised in these cases. The quantum of tax, together with interest and penalties, levied in such cases invariably exceeds the amount on which the tax was sought to be evaded, thus effectively resulting in its realisation.”

So the real question that one would like Kejriwal to ask is what is the latest score on this French Government information front?

He has to do some big hitting as the final overs are nearing. Otherwise the match will turn out to be a tame draw. But it seems Kejriwal likes the T20 format.

Think-tank reports

For all those keen to know the quantum of black money generated inside or outside the country, you may have to wait till December when the reports of the three think tanks are expected to be out.

Three leading think-tanks — National Council for Applied Economic Research (NCEAR), National Institute of Public Finance and Policy (NIPFP) and National Institute of Financial Management (NIFM) — are conducting a joint study on black money.

> srivats.kr@thehindu.co.in

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