Hindustan Times: Pune: Tuesday, July 18, 2017.
The black
money economy in the country cannot be dealt with effectively without tackling
the political ecosphere and the real estate industry which are “the sources and
sinks of black money.” If the Narendra Modi Government’s thrust to constrain
the black money economy is to be successful, it will have to take a number of
collateral steps subsequent to demonetisation, a paper published by the Pune
International Centre (PIC) has said.
The paper
‘Containing Black Money: Possible Policy Mechanisms’ by Dr. V. Bhaskar, member
13th Finance Commission, has acknowledged “insightful comments” from Vijay
Kelkar, architect of the GST model and Pune-based economist Prof. Pradeep Apte,
on the subject.
Published by
PIC, the paper states unambiguously that politics and real estate are the
primary sources and sinks of black money in India, the other sources being tax
evasion, corruption and criminality.
One of his
primary recommendations is that “all political parties should be compliant with
the provisions of the RTI Act.” As a part of this effort, the Election
Commission of India (ECI) must demand that political parties should publish
their accounts after they are audited by an CAG (Comptroller and Auditor
General) approved auditor and submit details of all donations above Rs 20,000
to the ECI under their annual returns.
“When
donations below R.20,000 exceed 20% of the party’s total receipts or Rs 20
crore, details of all donations should be provided,” Dr. Bhaskar has noted. He
has recommended that all parties which do not comply should be de-registered by
the ECI to underscore transparency in the funding of political parties.
A noted
economist and an ex-IAS officer, Dr. Bhaskar has worked previously with the
International Monetary Fund, and at the ministries of finance, commerce and
industries.
Speaking to
Hindustan Times, Dr.Bhaskar said bringing political parties under RTI Act was
the most important recommendation that he has made. “The Election Commission
has the powers, the law is there; they only need to act,” he said.
He also
stressed that “there is too much of legislation in the country; what we need is
implementation.”
According to
him, apart from tax evasion, corruption involving the political executive and
the bureaucracy, and criminality were the major sources of black money. He said
that increasing Government expenditure on infrastructure projects, irrigation
schemes and social welfare projects, as well as allocation of natural resources
to private parties for use “afford opportunities for the generation of illegal
incomes.”
He has noted
that corruption (tax evasion and misuse of power) is equally prevalent in the
private sector, especially in the education and health sectors.
Organised and
unorganised criminality in the form of crimes involving drugs, extortion,
prostitution, and human trafficking generates resources which escape tax.
Pune
International Centre’s Honorary Director Prashant Girbane told HT that the
report by Dr. Bhaskar written after demonetisation, has been published by the
PIC. “The report would be sent to the government in the due course. It’s
objective is to create public discourse and discussion,” Girbane said.