Establishing a system that ‘eliminates the scope for corruption’ was an important promise made by the Bharatiya Janata Party in its Election Manifesto, 2014. The methods to achieve the goal were identified as a) Public Awareness b) Technology based e-governance c) System-based policy driven government d) rationalization and simplification of tax regime and e) simplification of the process and procedures at all levels. Apart from this the party promised i) minimization of generation of black money ii) tracking down and bringing back black money stashed in foreign banks and offshore accounts iii) enact new laws and amend existing laws for the purpose and iv) proactively engage with foreign governments to obtain information on black money. These parameters are credible enough to measure the success of the NDA government in the sphere of eliminating corruption and recovering black money. The government, having completed its half-life, is about to enter fourth year in office. This makes a good occasion to assess the performance of the government.
The previous government was heavily riddled with scams and scandals. A writ petition had been filed in the Supreme Court by Ram Jethmalani and others in 2009 on unaccounted money from India parked abroad. The Anna Hazare movement for Lok Pal Bill had put the government on back foot. The UPA government thus appointed a nine member committee headed by Chairman, Central Board of Direct Taxes in May 2011 on measures to tackle black money in India and abroad. A white paper on black money was published exactly after a year in May, 2012. On July 4, 2011 the Supreme Court gave an order in the Ram Jethmalani & Others versus Union of India asking, amongst other things, for formation of a Special Investigation Team (SIT). The UPA government tried to unsuccessfully contest the idea SIT, managing only to delay it by three years.
The first decision of the NDA government was constitution of SIT on Black Money on May 27, 2014 as per the Supreme Court order. It is chaired by of Justice (Retd) M.B. Shah whereas Justice (Retd) Arijit Pasayat is the vice chairman. Till date the SIT has submitted six interim reports to the Supreme Court. Most of its recommendations have been accepted by the government. As per its recommendation, the government has declared cash transactions above Rs.3 lakh as illegal and punishable under law. Another proposal, on making holding of cash above Rs.15 lakh or above illegal is under active consideration. According to Justice Pasayat, Rs.70,000 has been detected in black money since the formation of the SIT, including Rs.16,000 crore stashed by Indians abroad.
Over the last three years the NDA has provided a clean government. There has been no shadow of scams and scandals on the government. The previous government’s second term was riddled with cases of scams and scandals. Prime Minister Narendra Modi is not only personally seen as incorruptible, but has kept his government on tight leash. People have found his declaration ‘Na Khaata hoon, na khaane deta hoon’ (neither do I take bribe, nor allow others to take) reassuring.
The government has taken several legislative, administrative and technological measures to eliminate corruption and black money. Amongst the legislative measures the principal ones are formulation a) Black Money (Undisclosed Foreign Income and Assets) Imposition Act, 2015 b) Benami Transactions (Prohibition) Amendment Act, 2016 c) Securities Laws (Amendment) Act, 2014 and d) the Specified Bank Notes (Cessation of Liabilities Act), 2017 etc.
A total of 648 disclosures involving undisclosed foreign assets worth Rs.4164 crores were made under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Similarly, the Income Disclosure Scheme (IDS) that was operative between June 1 and September 30, 2016 led to 64275 declarations with an aggregate of Rs.65250 crores of previously undeclared income.
India had received a third of its foreign direct investment between 2000 and 2015 via Mauritius. There was strong suspicion the island route was being used for money laundering and round tripping of black money into India. Thus May 11, 2016 India renegotiated its three decade old Double Taxation Avoidance Agreement (DTAA) with Mauritius. The new taxation regime has eliminated the scope for round tripping of funds.
Though the idea of direct benefit transfer (DBT) to beneficiaries’ bank accounts was devised by the previous government, most of the intended beneficiaries did not possess bank accounts and therefore, the objective of eliminating leakage and pilferage could not be met. However, the NDA government’s Pradhan Mantri Jan Dhan Yojana (PMJDY) led to enormous increase in banking cover for the poor. Till date 28.38 crore bank accounts have been opened under this scheme. This has made DBT and electronic transfer of funds a reality for the poor unlike before. The NDA government has pursued the Aadhar Card project with greater zeal. While the previous government had failed to bring any legislation on the project, this government brought a strong Aadhar Act, 2016. It is estimated that the JAM (Jan Dhan-Aadhar-Mobile) trinity will bring complete accountability in personal transactions.
Demonetization of Rs.1000 and Rs.500 notes was a major move towards elimination of black money by the government. It was estimated a major chunk of black money in liquid mode was stashed in bank notes of these two denominations. A major part of it was shed or disclosed due to demonetization. However, a complete picture of exact effect of demonetization on black money can only emerge when an official report is issued by the government. Prime Minister Modi used demonetization as an opportunity to promote cashless transactions. The government organized several Digidhan Mela across India, and out with mobile app BHIM (Bharat Interface for Money) based on United Payment Interface (UPI).
Electoral funding lies at the root of political corruption. Bringing transparency in electoral funding is also at the top of the government’s agenda.
About:Shri PRIYADARSHI DUTTA is an independent researcher and commentator.Views expressed in the article are author’s personal.