March 1, 2011 2:49:12 am
Black money,the popular moniker given to the billions seeded by dirty deals and whisked away abroad from the taxmans prying eyes,has received scanty attention of finance minister Pranab Mukherjee in the Budget of 2011-2012.
Presenting the Budget,the finance minister conceded that the generation and circulation of black money is an area of serious concern. To deal with this he pronounced a five-fold strategy,which may result in repatriation of illegal funds stashed abroad.
While corruption is the prime reason for creation of black money and there have been eight major scams during the recent years,not much concern is shown in the Budget,except for constituting a Group of Ministers for tackling this aspect. However,the fact is that the illicit financial flows out of India have grown uninterrupted at 11.5 per cent a year. Mauritius has been suspected to be a facilitator of black money round-tripping.
To combat the evil of black money generation the government needs to have agreements with Mauritius to plug the loopholes. Of late,Mauritius has provided Indian authorities with information on more than 90 cases of suspected tax evasion and financial malpractice over the past three years.
What is needed today is a complete overhaul of the administrative structure. The use of information and communication technology (ICT) in the administration would be instrumental to increase transparency,to simplify the administration and to reduce interaction between the civil society and officials. It creates disincentives for corruption by creating fear of exposure. An integrated management information system would ensure that the evasion and,hence the generation of black money is stopped.
Finally,the government should also strengthen the office of the central vigilance commission by providing more teeth to the institution.
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