The government may make mandatory the disclosure of high-value purchases such as property and jewellery. Stung by growing public outrage over corruption, finance minister Pranab Mukherjee will on Monday spell out steps taken and planned to curb proliferation of black money.
There are no clear estimates of the size of India’s black economy but the amount is pegged between $462 billion (Rs.22 lakh crore) and $1.4 trillion (Rs.77 lakh crore).
Mukherjee will present in Parliament a “White Paper on black money” that draws heavily on the recommendations and findings of the black money committee report drafted by a panel headed by the Central Board of Direct Taxes chairman.
The paper, which is unlikely to name persons suspected to have illegally stowed away money in overseas bank accounts, is expected to propose voluntary disclosure of all high-value transactions.The committee, set up in May last, has called for stiffer laws to curb generation of black money, including raising to 10 years from seven the maximum jail term for government officials found guilty of accepting bribe.
Setting up of lokpal at the Centre and lokayuktas in states at the earliest for time-bound decisions in graft cases is another suggestion.
Stock brokers and insurance agents may have to provide information as part of a crackdown on money-laundering that impacts the banking and financial sectors. The government is working on changes in the anti-graft law to cover private sector.
“While the public sector is over-burdened with archaic rules, the private sector has little or no regulation,” an official said, requesting anonymity.
The paper is likely to have a roadmap for a national tax tribunal mandated with sweeping judicial powers to clamp down on illegal transactions — found to be rampant in real estate and construction sectors in a pilot survey by tax authorities. Differences between finance and law ministries have been holding up the proposal for 20 years.
The government plans to turn the screws on 'Ponzi' or multi-level marketing schemes. A central regulator for these get-rich-quick schemes, for which millions of Indians continue to fall, is proposed.
Not only the Opposition and civil society but the Supreme Court, too, has been critical of the government for not doing enough to bring back illicit funds from tax havens.