Fast-track courts to expeditiously deal with financial offences and deterrent punishment for offenders and promotion of banking channels for transactions were among the measures proposed today in a multi-pronged strategy unveiled by government to curb black money menace.
The much-awaited 97-page White Paper on black money tabled by Finance Minister Pranab Mukherjee in the Lok Sabha,however,did did not mention any names or provide an estimate of such funds within and outside the country.
Improving the reporting and monitoring systems to track Bullion and Jewellery transactions and simple reporting systems in real estate deals to facilitate the development of a nationwide database were also urgently proposed in reducing flow of black money.
Coming out with strategies under “four different pillars”,the document said the introduction of the proposed Goods and Services Tax(GST) would be a “major step” in integrating the efforts of different agencies dealing with black money.
The White Paper also made a case for preventing misuse of “off market” and “dabba trading” on equities and commodities market.
Noting that the Income Tax Act has made it mandatory to obtain PAN or Form-60/Form-61 for purchase of bullion above Rs five lakh,the document said there is a need to “catch” all transactions and the best bet would be the proposed GST Act.
” …there could be promotion of banking channels including use of credit and debit cards since they leave adequate audit trails and hence disincentivise black money generation.
With electronic transfer facilities beign available to trade,one can forsee this as one of major thrusts towards strengthening accountabiliy and discouraging unaccounted acativities,” it said.
The White Paper quoted various estimates of other agencies on the issue of quantum of black money abroad.
It made a reference provided to data provided by Swiss National Bank which said the “bank deposits of Indians in Swiss banks have decreased from Rs 23,373 crore in the year 2006 to Rs 9,295 crore in the year 2010.”
The White Paper said the Government will have to take a decision on whether India should have a revenue-sharing agreement with Switzerland from taxes on assets held by Indian residents in the European nation without learning the identity of the defaulting Indian residents. Switzerland and the UK have a similar agreement.
“The Government looks forward to discussion on this important issue within and outside Parliament before taking any further steps,” it added.
The White Paper broadly came out with strategies on reducing disincentives against voluntary compliance,reforms in vulnerable sectors of the economy,creating effective credible deterrence and supportive measures.
It said black money cannot be effectively fought unless the judicial machinery to deal with it is specialised and the trial of offences is expeditious and punishments exemplary.
The Law Ministry should take up the issue of setting up fast-track special courts to deal with all financial offences on a priority.
The document suggested that the High Courts may consider setting up exclusive economic offences sourts with special summary procedure.
It said government can consider providing tax incentives for use of credit/debit cards as practiced in South Korea.
Provision for collection of tax at sources at a low level on cash purchases be also considered as a possible policy option,it said.
Referring to the issue of institutions like Lokpal and Lokayuktas,the Paper said,”(they) need to be put in place at the earliest,in the Centre and the states respectively,to expedite investigations into cases of corruption and bring the guilty to justice.”
On the possibility of any tax immunity scheme,especially gold deposit scheme,to deal with black money,it said,”The issue of complete tax immunity needs to be examined in the light of other policy objectives.”
The document seeks to dispel the impression that government was not doing enough to deal with black money and talks about various policy options and strategies it has been pursuing to address the issue of corruption in public life.
BJP ridicules White Paper on blackmoney,likens it to ‘bikini’
New Delhi,May 21 (PTI) Describing the government’s White Paper on black money as “disappointing” and a “non-paper”,BJP today said it is “like a bikini” as it hides the essentials and reveals only the less significant details.
“This White Paper is in reality a non-paper. It is rather like a bikini as it conceals all the essentials and reveals only the non-essentials,” senior BJP leader Jaswant Singh told reporters here today.
The issue of Indian black money stashed abroad has been raked by the BJP time and again both inside and outside Parliament. Party veteran L K Advani had taken out a month long Jan Chetna yatra across the country to highlight the issue.
In the press interaction today,Singh said the White Paper has not revealed the quantum of Indian black money kept in tax havens abroad. Neither has the government shared details of steps it has taken to repatriate this wealth.
“The bank deposits of Indians in Swiss banks have decreased from Rs 23,373 crore in 2006 to Rs 9,295 crore in 2010. The government has not disclosed where this money has gone. Has it come back to India? Or has it been transferred to some other tax haven? Or has it been invested somewhere?,” Jaswant Singh said.
The Opposition has been demanding that the government make all efforts to bring back this money as has been done by countries like US,Germany and Ireland,among others.
Singh said the White Paper is also silent on the black money made by illegal sale of arms and armaments,evasions on stamp duty especially in land transactions,and use of such funds in politics.
“This document has several shortcomings. It does not explicitly explain what has been done to deal with black money in arms and armaments,” Singh said.
He alleged that the generation of black money through stamp duty evasion especially in land transactions has not been revealed.
“The black money made by corrupt politicians has also not been revealed. This is a disappointing document. An opportunity of cleansing politics has been lost,” Singh said.
The BJP leader insisted that unilateral efforts by the Indian government will not be enough and it should work with other governments to bring back the black money.
“The names of the black money account holders have not been revealed,” Singh said,adding that he was aware there are confidentiality clauses but still the names of those who have made money through illegal means should be exposed.
A White Paper is aimed at separating the truth from falsehoods and this document has failed to do so,Singh said.
Asked if Indian money abroad is being brought in through Participatory Notes from Mauritius and other countries,Singh said,”This is not an issue of Participatory Notes. It comes through stock exchange investments by FIIs. Participatory Notes should not be seen as a solution for black money.”
Singh maintained that the investment climate in India today is no longer what it was during the erstwhile NDA government.
The BJP leader said countries like the US had taken up the issue of black money to fight terrorism and drug money for which also such funds are used.
“Even the UN adopted a resolution on the issue,” Singh said.
White Paper suggest incentives for use of credit,debit cards
In bid to check proliferation of black money,the White Paper has suggested tax incentives should be provided to encourage use of debit and credit cards and electronic transfer.
“Another important measure in this regard could be the promotion of banking channels including use of credit and debit cards,since they leave adequate audit trails and hence disincentivise black money generation,” the White Paper on black money tabled in Parliament said.
“Government can also deliberate providing tax incentives for use of credit or debit cards as practised in Republic of Korea. Provisions for collection of tax at source at a low level on cash purchases may also be considered as a possible policy option,” it said.
Payments by debit or credit cards through e-service intermediaries will simplify and encourage payments in these modes and reduce the cash economy,it said.
With electronic transfer facilities being available to trade,it said,one can foresee this as one of the major thrusts towards strengthening accountability and discouraging unaccounted activities.
The report emphasized that it is imperative that payment of wages and salaries in the private sector should also be through banking channels and become cash-less,in line with the government objective of financial inclusion.
Noting that trade practices such as cheque discounting should be discouraged,it said,towards meeting that objective the validity period of cheques or demand drafts has been reduced from six months to three months from April 1,2012.
The reduction in validity will discourage discounting of negotiable instruments.
The report also noted that as of now there are no legal restrictions to keeping very large amounts of cash with oneself or transporting it from one place to another. One is neither required to report it nor provide any explanation for it.
“There have been suggestions that the government may consider amending existing laws,including the Coinage Act 2011,The Reserve Bank of India Act 1934,FEMA,and the Indian Penal Code,or enacting an entirely new statute aimed at regulating the possession and transportation of cash above a particular threshold limit,” it said.
This may include creating a limitation on cash holdings for private use,as well as provisions for confiscation of cash held beyond such prescribed limits,it said.
However,it said,such laws need a broader political consensus to emerge for their acceptance in Parliament.