The Reforms I Expect in india - Ways to Curb Black Money

[Guest guest]

The reforms I expect in India – The next Generation

The ways to curb black money

The purpose of my sending the articles through th is mailing system to all

of you, is only that, at least one amongst you can seriously take these problems

to heart and those who are close to the Government may try to get the

suggestions implemented. The presentation is not meant for any reward or

remuneration, nor for appreciation. I consider this as my duty as a proud

citizen and I look forward for reforms keeping in view of the The Next

Generation.

Black Money, that is unaccounted money and Corruption or corrupt practices, is

interlinked. Unless there is a change in the attitude of the political parties,

corruption cannot be controlled and as long as corruption is not controlled,

growth of black money becomes inevitable. Then, within these parameters the

best solution for this challenging problem should be planned out. Sometime ago,

may be, twenty five years back when I was designing “Common Universally

Acceptable Paper Currency” with a different ideology, the “Black Money” problem

was also to my attention and then I drafted a note and sent it to the News

Papers for publication. Interestingly there was response from different sectors

including Planning Commission and nothing could presumably be the ultimate

result. However, the subject relating to Universally Acceptable Paper Currency

was taken by the University of Economic Sciences, Berlin and the result is the

present EURO CURRENCY.

Back to the subject, on account of hard cash in the form of Black Money, not

coming to the account, the Government is losing a lot of revenue and it is not

in a position to deliver the goods expected of it. Due to falling short of

resources, the deficit between revenue and expenditure, has become another

problem every year resulting into additional taxes only on the legitimate tax

payers while non-tax payers particularly money hoarders are indirectly gaining

support. Added to this, money hoarders or holders of “Black Money” are

controlling political parties, there upon diluting the values. The country is

not gaining progress in the lines expected of it due to mixing up of all this. I

believe,the next Generation is aiming highly on it with lot of demands and

expectations, therefore a solution to this burning problem has become a must.

Accounting of a transaction will help the Government to find a solution to

this ever growing problem. The business establishments are not accepting

accounting of the transaction due to “complicated tax system”. There is a

saying – “if you cannot convince, confuse”, perhaps this is being followed by

the Government. The confusion that the Government has created this year by

introducing new tax returns is really a mess and even the Accounts Experts and

the Tax Consultants broke their heads to understand and realize what it is.

Fundamentally, a simple system – an understandable system – an easy return, will

encourage the tax payer to accept the Policy of the Government. I do not know

why the Government disowned the simple returns which we planned long back – I am

also one of the participants in the tax return designs. That was considered to

be most appropriate and simple, and now why the Government did changed the

simplest form to this complicated return, perhaps they

too may not know. All the same, a simple tax return system will encourage the

tax paper to come into the tax structure and a portion of the money remains

accounted.

In the direct tax system, instead of complicated slabs, there should be only

one uniform slab for all salaried irrespective of the salary drawn while the

existing savings pattern continue. This will help the Government to improve the

total savings of the salaried by giving the salaried enough retirement

protection.

The next major issue is “Billing”. Billing is not done in many establishments

thus the transactions are not routing through the accounting system, thereby

giving scope for tax evasion. I suggest the Government to amend the laws in

such a manner that all transactions beyond, say, Rs.1000/ or so must be through

credit card or cheque. These days almost everyone is possessing “PAN CARD” for

some reason or the other, as it became a must for certain transactions.

Likewise, usage of Credit Card has also increased and this will be an excellent

tool in the hands of the Government.

The basic principles to curb black money are 1) making people to accept the

Tax System through simple return and simplification of the procedure, 2) making

the transactions routed through proper accounting system, 3) elimination of Cash

based transactions, 4) creating an unavoidable situation so that everyone has to

remain in the structural formation of the system.

When we accept “credit card payment” for transactions beyond Rs.1000/,

naturally money starts entering into the cycle. The second advantage of this is

elimination of hard cash which alone is the route cause for “hoarding or Black

Money or Unaccounted money”.

An unavoidable situation is such, today, for any transaction beyond

Rs.50000/, presentation of a Pan Card has become a must in any bank. Thus

people have come to the “Pan Card” circle; interestingly we can find long queues

in the counters where “Pan Card” applications are accepted.

In the similar fashion, any bank should take address proof through the Ration

Card or Voters Card, before granting a Credit Card. If either of these is made

mandatory for the bank, everyone is naturally monitored to become a voter thus

giving scope for the quality of voting over a period of time, and furthermore,

through Ration Card system, population census becomes easy, besides monitoring

flow of essential goods.

Andhra Pradesh Government has done well in this regard, where every ration

card contains the LPG connection number, number of residents, and such other

fundamental details needed of a household, and this is further guarded by

“Finger Print Bio” system to prevent misuse. This is also interlinked with the

issue of passport.

Similar exercises are already done by the Government over the past few years

and a base is already available, like voter card etc. Therefore there is no loss

of time in implementation of a new procedure, in this regard, and we can safely

plan out the future for regulating the transactions through this base system.

Thus Credit Card shall become the tool for payments, directly making the

transactions start entering into the accounting cycle. The ceiling should be as

low as Rs.1000 so that a majority of the transactions enter into the procedural

aspect of the accounting system.

Rome is not built in one day, so also economic reforms in India cannot be done

overnight. But certain steps – which are practicable and suits implementation,

are needed absolutely.

This is a long term plan but short term strategies are needed with a clear set

of mind, and this is only solution that suits India. When a system is

habituated, it naturally keeps the doors open for curbing of black money and

proper increase of the revenue to the Government.

Let us build up a better and healthy economic atmosphere and that is the only

primary and fundamental responsibility we have, in front of us. This mailing

system does not permit me to write the modalities more than this, but surely I

have good modalities that are conveniently suited. If the basic principle is

accepted, perhaps, we can do well in a via media mode, let the likeminded people

join together to bring reforms in building a great future for Mother India.

Dr P V Sesha Sai Aswamedhayaaji

 

Dr P V Sesha Sai Aswamedhayaaji

Camp: Memphis, USA e mail shodasisai,

web www.ashwamedhayaagam.org, blog: http://aswamedhayaaji.blogspot.com

Cell 901 592 9130 4th August 2007