Modi’s black money war cry eyes polls

Prime Minister Narendra Modi’s impassioned plea for chartered accountants in the country to join the crusade against black money and tax evasion made while addressing them in New Delhi on Saturday and beamed to state capitals where parallel functions were organised, was a subtle signal to them not to shield the corrupt. He said it was strange that action had been taken against only 25 CAs in the last 11 years by their professional body. The message was indeed unmistakable. Warning that his government was committed to strict action against companies that were involved in hiding black money, he said that an estimated three lakh companies were under investigation in the post-demonetisation datamining of deposits of whom one lakh had already been deregistered for serious irregularities found. An estimated 37,000 shell companies had been identified, he revealed. The Prime Minister added that the government’s actions were based on only half of the data-mining exercise and that there was more to come. The cold reality is that this is only the tip of the iceberg. More concerted action would be required to rid the country of the cancer of corruption.

Modi further cited the data of Swiss banks released recently, which showed a sharp dip in the money Indians kept in these safe havens. As per the latest data published by central banking authority Swiss National Bank (SNB), money parked by Indians in Switzerland’s banks nearly halved to the equivalent of about Rs 4,500 crore in 2016, marking the biggest ever yearly decline in such funds. What he left unsaid was that this did not necessarily mean that hoarding black money was on the decline. Evidently, with the Swiss promising greater transparency in two years, investors were looking for alternative tax havens. The Prime Minister said: “Our government has taken a tough stand against those who have looted the nation. Those who have looted the poor will have to give back what they have looted.” Reflecting on the high-level tax evasion that has taken a huge toll on the Indian economy, Modi said that it was a bitter truth that only 32 lakh Indians have declared over Rs10 lakh income, despite crores in high-end professions. Indeed, the Prime Minister is on course but, as he acknowledged, vested interests will doubtlessly resort to sabotage and subterfuge which were huge challenges for the government. That the recent ushering in of the Goods and Services tax to replace all indirect taxes was a move to curb corruption just as demonetisation was is Modi’s take. That there is an element of earnestness in this is undeniable. Clearly, the anti-corruption measures would be one of the important election planks in the 2019 Lok Sabha elections. Widening the tax base seems to be a goal too. The heat on tax-evaders will predictably increase. But if the Centre is selective in dealing with corrupt elements, the whole purpose could get defeated. Indeed, the Modi government’s war on black money and tax evasion will be under intense scrutiny for its transparency and integrity.