From a crackdown on dubious charity contributions to encouraging the use of credit and debit cards, from tracking realty deals to monitoring jewellery purchases, the government has proposed a wide range of measures to combat black money.
The proposals are part of the white paper on black money tabled in the Lok Sabha on Monday by finance minister Pranab Mukherjee.
The white paper does not, however, disclose names of persons suspected to have stashed away huge amounts in secret overseas bank accounts. But it does make a strong pitch for setting up of anti-graft bodies --lokpal and lokayuktas.
The paper says deposits of Indians in Swiss banks decreased from Rs 23,373 crore in 2006 to Rs 9,295 crore in 2010.
The paper describes how deals thrive outside the financial system in a bustling cash economy that evades taxes by creating a web of transactions to obscure the sources of slush funds.It does not give an official estimate of the size of India’s black economy, but favours tax incentives to use credit and debit cards for small day-to-day purchases to curb cash transactions.
“The government can also deliberate on providing tax incentives for use of credit or debit cards as practised in (South) Korea,” the paper says.
Rejecting the white paper, BJP patriarch LK Advani said, “The government not only failed to say who are the people who held these accounts but also what concrete steps were taken to bring the money back. I am disappointed.”
The paper hints that the government does not favour tax immunity schemes to encourage people to disclose money stashed in overseas accounts or locked up in gold.
At present, there are no legal restrictions to keeping very large amounts of cash or transporting it from one place to another. One is also not required to report it nor provide any explanation for it.
There have been suggestions that the government should enact laws to regulate the possession and transportation of cash above a particular threshold limit.
“Such laws need a broader political consensus to emerge for their acceptance in Parliament,” it says.