In India, black money refers to the funds earned on the black market. No taxes are paid on this unaccounted income. The total amount of black money deposited in foreign banks by Indians is unknown.
One popular way to convert black money into white is by showing income in cash. Income from tuition, professional fees or commission can be shown as cash by many taxpayers.
Another method that people use to convert black money into white is by showing bogus loan entry. In such cases, people give black money to friends or relatives and take a bank cheque from them. This is a kind of bogus loan entry.
In some cases people give repayment of a loan by giving back dated cheques. As per recent data released by the Income Tax Department, only 4.1 per cent filed income tax returns in 2015-16.
Out of 125 crore people, only 5.16 crore people actually file income tax returns in India. Data shows that actual taxpayer count is even less than 5.16 crore. Only 1.3 crore individuals in 2013-14 paid income tax in India and just 4 per cent people pay taxes. In comparison, 53 per cent of people pay taxes in the United States.
An anti-black money scheme in 1975 raised Rs 241 crore and another in 1965 recovered Rs 29 crore. Let's wish Prime Minister Narendra Modi luck in his crackdown against black money. What needs to be curbed is the black money with the vast majority of politicians, especially of the ruling class.
I am reminded of a story that was doing the rounds when I was a director in money minting in the Ministry of Commerce in 1979. A minister struck a deal of Rs 20 lakhs with a businessman to clear his file. The minister wrote on the file "Approved".
This good news was conveyed by the hangers on. The businessman wanted to save money and when the required payment was not made on time, the minister called for the file and wrote "Not Approved". The businessman repented and brought the agreed amount for getting his file released. The minister said now he would have pay to Rs 50 lakhs, a princely sum in the 1970s. The amount was willy nilly paid.
This continued till the change of the government in 2014. The cases of 2G spectrums, Coalgate and the telecommunication scams have continued in different forms.
Of course, it will be wrong to accuse every politician of corruption and wrongdoing. For instance, some prime ministers with whom I worked, like Manmohan Singh and VP Singh, were examples of probity.
A commerce minister once told me that I was only one of the three officials about whom even our worst enemies could not hurl accusations of corruption. The other two being Abid Hussain and VC Pandey, who were entitled to government cars. I was the only one using a government-allotted Vespa scooter, purchased after 19 years of service.
When I asked VP Singh as to what he felt about meeting businessmen, he said the business people did not want him to be harsh on corruption. The corruption battle cannot be won by any government alone. People have to come out and expose the corrupt bureaucrats. After all, the black money with bureaucats is corruption money as their salaries are just sufficient to let them live a simple life.
I am proud of the fact that after joining the Indian Police Service in 1961 and starting my on the job training in 1962, I would walk from my house to the police station about 4 kilometres. This way, I could save Rs 10 per month to rent an old cycle. Now you find even clerks and other lower level staff travelling in luxury cars, without being questioned. It is rather overdue to get rid of people who want bribes for doing their work.
