by Harish Gupta, National Editor, Lokmat Group
In this very page last week, I wrote about the daring racket in
smuggling classified documents out of government offices in Delhi and mentioned
that the people behind it could be dishonest businessmen & industrialists
who might pose the biggest ever challenge to Prime Minister Narendra Modi. “Who
will blink”, I kept the question hanging. However, after the unusually
aggressive strategy against owners of black money accounts abroad announced in
Finance Minister Arun Jaitley’s budget speech last week, and some stray but
pointed remarks by Modi himself in Lok Sabha on Friday, at least it
is clear that the Prime Minister is in no mood to blink. The connection betweenmidnight forays into government premises to
snatch cabinet memos with unworried aplomb, and stashing loads of cash in a
Swiss office of HSBC Bank for decades without batting an eye, is obvious. It is
unaccounted money that breeds political power which, in its turn, breeds a
sense of being the master of the universe. The previous UPA regime too fell a
victim to these unscrupulous businessmen and their extortionate methods. But
nobody protested. Not in the public, at least. However, the Modi-Jaitley team
seems ready to take them head-on. The careful planning and determination the
government has shown is superior to that of any previous regime crusading
against corruption, including the late V. P. Singh’s government.
The tone was set by Modi himself who said a day prior to the
presentation of budget that his government was committed to recover illicit
money hid out in shadow accounts and would “spare no one” found guilty, even if
that invited the charge that he was pursuing vendetta. However, Modi was
uncharacteristically polite to the opposition, entreating its leaders not to
look at the corruption issue through the “prism” of politics. “I want that this
(corruption) issue should not remain confined to political debate; otherwise,
we will remain engaged in ‘tu tu main main’ and ‘kiski shirt zyada safed hai’.
On the eve of the budget spelling out the concrete measures against the black
money mafia, Modi shared some of the secrets with MPs. He said Finance Minister
Jaitley had persuaded the Swiss authorities to be “more forthcoming” with
information on those holding illicit accounts in their banks, and that he had
himself lobbied with G20 leaders to hold the issue of money laundering among
the grouping’s priorities.
In his budget speech, Jaitley, keen to avoid sensationalism, put
the illegal foreign account issue not up top but around the middle, and
maintained the even tenor of his speech. But the devil, as it is said, was in
the detail.
In the Indian system of tax laws, evasion is usually regarded as
a civil offence, with the chance of a hassle-free exit from the tax net being
bright as long as one is ready to pay the dues with or without fine, including
the compounded charges. The claim of the Income Tax Commissioner is not final
as a resourceful assessee can approach the settlement commission, besides other
authorities like appellate tribunal and the superior courts. However, Jaitley
dropped a bomb when he said that he’d soon bring a law against those with black
money parked abroad which would treat the offence as non-compoundable, nor
would the offender have access to settlement commission. Even more menacingly,
under the proposed act, the offence of siphoning off the untaxed riches into
foreign banks would no longer be treated as civil offence; it will be a crime calling
for a maximum rigorous imprisonment of ten years. It is not difficult to
imagine the cold sweat Jaitley’s words brought on some brows in Mumbai.
The FM elaborated that the penalty in such cases could be as
high as 300 per cent (four times) the evaded tax. It is a booby-trap Jaitley is
preparing to lay because India’s robber barons usually divvy up their illegal
holdings into a number of accounts in the name of their trusted underlings,
thus spreading risk. If one of them is made to face trial under the new Act, he
(or she) must cough up four times the evaded tax, which is difficult without
naming its source; or the person must sing like a canary. A few months back,
the name of a former woman MP with corporate connections was floating in the
air as the alleged holder, in 2006, of an account in a Swiss bank with about
five million dollars lying in it at a given point of time. If this new law
becomes a reality, she may be forced to produce 20 million dollars in addition
to spending ten years in the cooler. If she can’t produce the money in a
legitimate manner, she will have to name her master. Which is what the
government wants.
Jaitley’s budget leaves no escape route for the habitual money
launderers who suppress information regarding their foreign assets while filing
tax returns. If such charges are proved, they too will be liable for rigorous
imprisonment for seven years. The FM’s roadmap to end the black money raj is
clear. Knowing that the illicit cash parked abroad is seldom stationary and it
keeps moving to and fro, often being held in India Delhi
In the history of Indian budgets, I think the 2015 budget of
Arun Jaitley will go down as the boldest challenge to the power of ruthless
moneybags who never accepted that the law is above them. They were always wary of
Jaitley but had a wrong notion of Modi, taking him as just another biddable
politician. But it is Modi who set up the SIT to investigate black money
outflow in his very first cabinet meeting. And now he and his FM are riding
full tilt at the black money badshahs, until their ‘boss’
asks: kitne admi the? Only two, but that should be enough.
(The author is National Editor
of Lokmat group)
