For all his racist inclinations, the white man would still want his coffee black. The Indian fancy for anything fair too comes with exceptions wherein white is taboo: Black hair is deemed the sole measure of youth. And then black money is the toast of the nation’s citizens, rajas & prajas alike. If the US $ is dubbed the Greenback, the Indian rupee should ideally be called ‘blackback’, for that is the predominant colour of money here. Indeed, black money, like the Almighty, is all pervasive, omnipresent and you bet, omnipotent too.
Though unaccounted money can lie in the form of investments, bank deposits, gold, land etc, it is generally hard cash, residing in suitcases and safes or under mattresses and bathroom tiles, that figure in our mental scheme as black money. While counterfeit currency is illegal right from its conception black money cannot be so stigmatised. All currency is born white from the same womb, namely, the government mint. Much of it gets tarred only by human touch. But black is not a permanent hue either; the colour changes depending on the use and the user and black money can easily be laundered and white washed. A porous system liberally allows for money to move seamlessly between the official and unnofficial realms.
Again, all of the black money, though concealed, is not immoral. In fact, much of it is earned by ordinary individuals through perfectly legitimate means and hard work. It becomes legal once it is subject to taxation, after being declared or discovered. Even in the case of illegal activities like smuggling, the Income Tax department is content with getting its pound; the smuggler can retain the balance probably to keep other arms of law at bay. Again, a substantial part of the population remains outside the tax net and their earnings would technically qualify as black money, though it is purely owing to the net not being wide enough. The Government itself has also consciously allowed some sectors like agriculture to remain beyond the purview of taxes and many rich farmers, humble or otherwise, are blissful beneficiaries of a scheme intended to help the true tiller.
Apart from the black money generated by multitudes of isolated individuals and through such official default, the usual suspects like big businesses, share market, real estate and film industry generate black money by tons. Estimates abound over the size of the black economy; some put it at around 40% of the GDP while there are those who claim that it is bigger than the official monetary system! India’s parallel economy is easily among the largest in the world. But despite its formidable spread and sweep and the mind boggling statistics of its size, all of the above sources of black money can, at least theoretically, be brought under check over a period. Eminent experts have put forward suggestions ranging from a low but flat tax that would make evasion irrelevant to recall and reissue of currency to flush out all the cash from suitcases, safes and yes, bathrooms.
However, there is one intransigent group that defies all such normal, formal methods, an elite that constitutes the biggest repository of black money but nevertheless can never be reined in: the political class. From TDS to FBT to VAT to what not, every single loophole has been systematically, sometimes even a tad sadistically, plugged by successive FMs so that the average citizen is deemed an eternal suspect and the tax due from him is secured somehow. But no FM has ever mustered the courage and conviction to take cognisance of the four fingers pointing inwards, at his own fraternity! A very basic canon of taxation is equity. Equality before law is also a constitutional necessity. But is there any equity in the tax laws, in intent and implementation? All official efforts at curtailing black money flies in the face of such double standards. All the lofty talk and prime time debates over fiscal deficits and such other economic jargon seem futile when those who vitiate and make a mockery of those figures are sitting right in Parliament or were in power in the past. Really what credibility can one attach to the laws made by such law-makers?
Let’s be specific. Film stars and real estate magnates routinely get guests from the tax department often before day-break. Sensational announcements of the ‘incriminating documents seized’ inundate the media. Touchwood. But a Mayawati cooly declares her unaccounted wealth as gifts from her cadre and even gets the official stamp of approval from the IT department. Lalu’s clan, cadre and cattle thrive gloriously after having had their fill of fodder without as much as a hiccup! In TN, CMs and Ex-CMs, their friends and families, parade pompously like paragons and Pharoahs, yet they are not called to account. How many disproportionate assets cases against politicos have come to their most obvious conclusion? Forget a tax-raid that begs to be done in every such case, will the tax hounds as much as bother to bark at them?
There is another canon that says the cost of collecting a tax must be worth it. Can’t the diligent FM calculate the ‘massive yield’ at a minimum effort that searches and raids at the residences of those clapping and thumping desks during his budget speech would entail? Is it not logical that the unearthing of black money should begin at the fountainhead? In any case is it not a far more economical and equitable way than charging all those hapless citizens 0.1% for withdrawing their own money? Or do the squeaky clean M Singh and the smart PC genuinely believe that their political colleagues have never seen a packed suitcase in their lifetime?
PC can ponder on this over a cup of coffee. Black coffee, ideally, if only as a reminder!
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