GD Monday - 'Black Money In India' - Week 7

Anunay Sharan

As the world's 7th largest economy, we need to explore the aspect of 'Fiscal Deficit' first. Fiscal deficit , essentially has two components ,Capital Deficit and Revenue Deficit. While a contained capital Deficit is a good indicator, Revenue Deficit should ideally be zero. however, India reels under a Revenue Deficit of 2.8% of the GDP. A significant portion of this Deficit would be the result of inadequate collection on Taxes and money not collected/shown would be Black Money. Therefore, it is imperative that the black money be dealt with as quickly as possible. For the same, the tax collection should be made more robust and the IRS officers given more authority. Better surveillance and monitoring techniques need to be devised which would act as a deterrent towards evasion. The government has taken considerable measures. Cash payments, of large amounts are discouraged. Some banks have stopped issuing demand drafts against cash and every transaction above 50,000 rupees requires a PAN card.

1 Feb 2016, 07.19 PM

Harsh Vardhane

Author of the Amazon Bestselling book &quot;Social Media Marketing for Beginners&quot;           <b></b> <a href="#_" rel="nofollow"></a> <a href="#_" rel="nofollow"></a>

The various pathways through which Black Money is stashed abroad must be blocked through proper regulations,laws and their efficient execution.Special task forces must be made to curb down Hawala traders. Various NBFCs play a vital role today by working out the loopholes of law and hiding from the shadow of regulators- The recent example being of Sahara India.Banks like HSBC and UBS consistently provide secret advisory and guidance to clients by introducing them to various pathways involving their Inter-Continental branches to send black money our of India.Although these measures will be effective in only money from being sent abroad, The real concern is Black Money which is inside the country and Why is it formed in the first place? The generation of Black Money shows a distrust in the govt.People believe that the taxes paid are not utilized properly or go to unnecessary govt ventures or in corruption scandals.Govt must encourage people,Create a feeling of trust and run awareness campaigns about how Black Money is effecting the nation and its people.

2 Feb 2016, 01.00 PM

Dhruvika Chawalla

Black money is one's income on which tax has not been paid. About 1.4 trillion dollars of black money has been stashed in the Swiss banks while the Swiss banks claim it is 2 billion dollars. After the government initiatives of penalizing upto 120% for the income not accounted for, 2500 crore rupees came back to India. 'Digital India' will further reduce corruption and will help in tracking of people's income.

2 Feb 2016, 01.24 PM

Rahul Datta

Drilling Support Analyst at Tata Consultancy Services

An accumulated wealth that does not participate in the development of the economy becomes a burden for every country . It harms the fiscal deficit and in turn effects the every day life of people due to its direct relation with the increase in the price of each and every commodity . In India , the tax evasion has been its major cause . The current government has been proactive in creating laws and passing the black money bill so as to curb the tax evasion. The efforts have been commendable but the results have not been satisfying due to the harsh punishments imposed in the bill which resists the offenders to disclose their hidden wealth. If only the taxes on this amount is obtained , it would be a great boost to the Indian economy and would further curb the practices of storing black money .

2 Feb 2016, 08.12 PM

Mridul Agrawal

Black Money, one of the most important agendas on PM Modi's election campaign, which shows the sentiment regarding the same in public as well as the govt. Importance- speculated that if all the Black money is brought back to the country, most of our deficit and poverty problems would cease to exist. The facts, as stated by my friends, support this speculation. Given its importance, we should analyse What causes funds to be stashed abroad - 1. Tax evasion - tax havens have lower tax rates than India and avoid taxation, saving income 2. Secrecy - the funds are protected as there is a non - disclosure policy by these foreign banks, limiting the action that can be taken by the Govt 3. Even money which goes Unrecorded is black money. So not all the Black money is outside the country. Which becomes an important factor to structure our initiatives for its recovery. The Black Money Act is a step taken in the right direction as it addresses undisclosed income from both within and outside the country, as well imposing strict penalty. Also, the Govt must exercise its influence with Foreign countries, so that they can do away with the non disclosure, which stimulates such tax havens in the first place. India stands a lot to gain addressing the Black money issue.

2 Feb 2016, 08.19 PM

aparna gopakumar

Student at University of Calicut

Corruption is nothing new in this society. It has always existed in different forms in this society. Recently, most talked about form of corruption is Black money. A lot has been said and done about this black money in India. But amidst all these, our government has failed to create a friendly environment regarding the tax laws. Rather, more harsh means were implemented for tax invaders.

3 Feb 2016, 10.59 PM

Akash Kumar

In India, Black money refers to funds earned on which income and other taxes have not been paid. The sources of black money are politicians, political parties and corrupt higher officials of government and its institutions that take bribes from foreign companies and invest the money abroad in tax havens for transferring to India when needed. Many times locally earned bribes are also sent to abroad through hawala channels. The Vodaphone tax case is a glaring example where foreign mnc has not paid tax lawfully with the help of companies located in tax heaven countries. Though several committee has been set up by Indian government, none of them has clearified how much black money is there in tax heavens and what are the efficient steps to get it back to India? For every political party it's a topic of get political importance. They use it as a weapon to score well in political elections. PM Narendra Modi requested people to vote for BJP as they will bring black money to India and distribute it among Indians and each one of us will get 15 lakhs. I just want to ask him where is that 15 lakhs ? I also think that we won't be able to bring back the black money to India because right from politicians to industrialists all are involved in it .I am hoping that "Black money and Imposition act which came into effect on july 1,2015 can act as a check for future black money transfer and government should take strict actions against the violators.

3 Feb 2016, 11.54 PM

Gargi Priyadarsini

Is india a Poor country?well the answer is No considering the amount of black money stashed in the Swiss Accounts.India has more money than all other countries Specified in the swiss bank account.Who are the holders of these accounts .Senior bureaucrats (IAS,IPS officers), Ministers of Export-Import,Commerce, Chief Ministers, Top Industrialists , Horse Trader, Liquor Trader.The government had made a promise to bring back illicit funds from overseas.the new Black Money Act will be a serious deterrent for generation of black money in future.But most importantly the government has to let go of the inhibitions and weed out the corruption at their level. We need to start a movement to pressurize the government to do so !! this is perhaps the only way, and a golden opportunity, to expose the high and mighty and get the black money back.Is India poor, who says? Ask Swiss banks With personal account deposit bank of $1500 billion in foreign reserve which have been misappropriated, an amount 13 times larger than the country’s foreign debt, one needs to rethink if India is a poor country?.

4 Feb 2016, 12.45 PM

Abhiroop Bhattachariya

Everyone has dicussed why Black money is an economic evil hindering the financial growth of the country. Indeed its true, but completely forgotten in the maelstorm is the negative effect of bringing back that humungous amount of money. If not properly regulated a sudden outburst of currency will have an inflationary effect. The amount of money stashed outside India is higher than our defense , education and transport budgets all taken together. So immagine this amount of money getting circulated suddenly in the market. There will be huge inflation, if its not regulated in an apt way. Black money is present in every economy, with China topping the list. The very presence of it is not a concern, but the jaw dropping magnitude of it in India certainly is. As in India most of the black money is generated due to tax evasion, it would not be a bad suggestion to deposit taxes without having to submit the sources of acquiring the wealth. Another way to curb the problem, will be to promote the usage of electronic transfers and e-wallet systems. However there has to be stringent policies in e-transfers as well, to avoid the Bit Coins, which are illicit, to have any effect on the economic harmony.

6 Feb 2016, 08.00 AM

Abhishek Thakur

Black money is a hot topic in our country.The amount of money pocketed by the politicians or businessmen in SWISS banks is humongous.The money on which tax should be paid is being transferred to other countries,that money could be used to development purpose. We keep on hearing that so much money has been brought back but where does that money go.Government is going in the right direction by curbing the illegal money but it needs to cut the roots from where it all started.Each and every individual should declare there assets and for this to happen strict measures should be taken to implement this.People sitting at the high positions like politicians, high profile businessmen,actors are the main culprit.They have set a bad example for other people in the country,this further instigates people to evade the laws.Setting up a law is not a solution but proper implementation should be done .

16 Feb 2016, 12.44 PM