By T Fightingstar L Mawlong
Today black money runs in every vein of the economy. It’s not new, not uncommon but very less talked about. Its economic and social repercussion is profound. A Biblical phrase – “For very one who has, will be given more; whoever does not have, even what he has will be taken away” – reflects well the societal effect of black money. It’s making rich people richer and poor ones are drowning to the margin line of existence; resulting in gaping economic and social inequalities. Further, black money has created frustration among honest people; increased the crime rates: and hampered the social service and economic development programmes. Sensational news about this ‘monster called black money’ is in the air yet again.
Just a few days ago the centre – in its effort to unearth black money held abroad – submitted a list of the alleged black money account holders in HSBC bank, Geneva, in Swiss banks, and LGT bank in Liechtenstein, Germany. It has been said that if this money is brought back to India, our entire debt can be repaid within a 24 hours. But black money is not just the untaxed cash stashed abroad. So much of black money is actively circulating in our economy. In fact today it is difficult to isolate a single sector of economy or administration that moves without the use of black money.
Black money (the ‘money which is unaccounted for and untaxed cash generated by dealing in a black economy, black market, or organized crime’) is generated in both legal and illegal ways. The legal way includes any unreported income that evades the due amount of tax. While the illegal way is bribery, illegal arms sale, smuggling, drug trafficking, fraud, counterfeiting of Indian currency, transnational organized crime, human trafficking, corruption and other nefarious designs, etc. If we look at our own backyard, we could see a fine (and most overlooked) example of the former in the form of the private tuitions. These private tuitions are big flourishing businesses with unreported and untaxed incomes. The corruption and routine extortion at toll gates are two common examples of the latter operating in our state; smuggling and drug trafficking being the others. Black money in our cities is gloomy enough but the villages and rural areas offer no respite. In villages, most headmen (the rural VIPs) are nothing less than the feudal socialist kings filling their coffers with undue royalty cash and at times looting and manipulating at the cost of the exchequer. On top of that, leakage in PDS is also rampant. And none of the militant outfits – from the ANVC in Garo Hills, the ULFA and NDFB in Assam to the PLA and UNLF in Manipur – could have survived without the inflow of black money. The concept of black money as such is not new. It has been a menace in the country for decades now, despites efforts and scores of laws to tackle it in recent times.
Let’s dwell a little on what breeds this menacing black money. Like other ‘legacies of greed’, black money gets created when the individual aspiration outplays national and social imperatives. With the development of a narcissistic attitude, we have come to regard money as God. Individual feels that only money can save one from all odds. Wisdom is scanty. Our lust for gain is limitless. Well there is nothing negative with material aspiration, but it is when material aspects of life outweigh the non-material aspects that money starts sucking the blood of humanity. If one cares to turn to the Buddhism concept of ‘madhyampratipada’ or the ‘theory of middle path’, one would be a little wiser. The theory of middle path emphasizes the need for balancing the divergent requirement of life at both material and non-material level. But who has the time for a stupid aged wisdom? When money is being regarded as God (panacea of all problems) then money as God reincarnates in the form of corruption, black money etc. It will then transmute the character of a rational human being and plunge a person into a mental and spiritual chaos. The empathy, clairvoyance and straightforwardness vanquish. Ironically, manipulation of the system is not seen as a legal or social breach but as an index of smartness!
Hence when taxation level becomes a little dizzying, a warped egoistic mind would evade tax. And with the narcissistic attitude reigning high, illegal activities and businesses continue and flourish. Behold, when miss money penny turns black and dirty, society asymptomatically plunges on a downward trajectory; and the system is corrupted in a most vicious manner.
Coming back to the new episode of black money; what of the recent centre’s move against the foreign account holders? I have my own reservation in it. Whether the naming and shaming drive come with a clean and a best of intention or not, it is difficult to be ascertained. Only the government knows best. Nevertheless the government’s motive is supposedly to bring back all the black money. In this regard, I submit to Srivatsa Krishna’s view in his article “Not so Black and White” in The Times of India newspaper on October 30, last. He is of the opinion that bringing back black money will be a slow and long process, and the government can do better by focusing on action at home against tax evasion and illicit activities of generating black money.
History tells us that if a state fails to curb the generation of black money, then it is a soft state. That state becomes prone to terror, and illegal activities and crimes of all kinds thus creating a vicious cycle. Serious domestic action against generation of black money is therefore imperative. Pernicious practices like online frauds, swindling, ‘over-spending during elections by political parties must be curbed. The genesis of black money is ‘money laundering’ (a process that converts the proceeds of crime, such as smuggling, illegal arms sale, drug running etc, into legitimate money). So the question is, where do we stand? Are we being soft on money laundering as has been so perceived?
Over the years the government has enacted a number of laws to curb illicit activities. Now more laws are in place. To tackle money laundering, the Prevention of Money Laundering act (PLMA) was enacted in 2002, and was amended thrice, first in 2005, then in 2009 and then in 2012. We also have the Finance Act, 2012 which has certain provisions to deal with the menace of black money and money laundering. Provisions are also there in the proposed Direct Tax Code (DTC) to check illegal flow of funds. A proposed Goods and Service Tax (GST) simplifies and moderates taxation as an incentive against tax evasion. We have also signed 88 Double Taxation Avoidance Agreement (DTAA) with different countries. India has also become a member of Financial Action Task Force (FATF) and the Eurasian Group (EAG). Both bodies are responsible for enforcement of global standards on anti-money laundering and combating the financing of terrorism. So to a question above the answer is No, India is not soft on money laundering or black money.
But the unending debate is on how many more laws and efforts are required. To me, from the law making side, central government has done more than enough. Increasing the number and the complexity of laws will only make things more chaotic. For, the more the complexity of laws, the greater is the temptation to maneuver and manipulate.
The truth of the matter is that the real fault-lines to rectify lie within the society itself. What we need is, in fact, a ‘proper intention’ and an ‘indomitable will’ from all classes of society. Without that the law is futile and proper implementation of existing laws is a utopia. If intention of law-makers, law-enforcers, and law-abiding citizen is not positive, then the law is the weakest instrument in the world. Thus if the motive behind the effort to unearth black money holders is far removed from being political, then a battle against black money by present government is well begun, notwithstanding success or failure. In other words, only a ‘clean mind’ can wipe out dirty or black money.