On a day the Narendra Modi government laid out the contours of new black money declaration scheme for tax cheats, it also left a big loophole that could potentially cause the entire exercise to fall apart— exempting deposits made by political parties from tax scrutiny and subsequent investigation.
This move is absurd, lacks logic and raises a big question on the very intent of the Modi government to unearth black money in the system at any cost.
Reason: The opaque political funding is the foundation of black money in any economy. It is that evil that feeds and nurtures all other forms of illegal cash in the system. Unless political funds are brought under tax scrutiny, everything else the government does in the name of black money hunt will be seen with suspicion.
The government move also show how there is a clear double standard for the common man and political parties when it comes to black money hunt. The aaam aadmi is supposed to bare it all, answer questions, face harassment even if his money is legit but politician enjoys a God-given immunity.
Take a look at what the revenue secretary Hasmukh Adhia told reporters.
"If it is a deposit in the account of a political party, they are exempt. But if it is deposited in individual's account then that information will come into our radar. If the individual is putting money in his own account, then we will get information."
The Section 13A of the Income Tax Act, 1961 is what gives immunity for political parties in respect of their income from house property, other sources, capital gains and income by way of voluntary contributions received from any person.
Political parties will merrily use this opportunity to put their black money (money for which there is no real source or income that is not taxed) on the table and would say that they got it all from small donors (cash donations less than Rs 20,000 does not need any source). It is not difficult to make backdated donation receipts. This defeats the entire purpose of black money operation.
Analysis by Association for Democratic Reforms (ADR) and National Election Watch in past few years shows that about 75 percent of the sources of funds to political parties remain unknown. Here is where the real problem lies.
When political parties arte party to accepting black money, how do one expect an honest action from them against the very same black money?
It is not a surprise that none of the opposition parties, including principal opposition party, Congress and its (occasionally) fiery leader Rahul Gandhi hasn’t uttered a word on political black money and hasn’t offered to give an example by daring to give own party’s financial details or declining any law-given immunity. That’s understood because all drinks from the same pot and it taste sweet.
But the larger question is why is it that always the common man suffer and the rich and powerful get away?
Why the double standard?
The ongoing demonetisation exercise, originally launched to counter black money and fake currency, has inflicted maximum pain on the poor, not the rich and powerful. The layman waits for hours in ATM/bank queue, face unemployment and financial loss, commits suicide because he couldn’t find enough cash for his daughter’s wedding amid the black money fight of the government, while the rich smiles all the way to the backdoors of banks.
Even in the post-demonetisation era, they have lavish weddings and joy of seeing bundles of new currency notes in their backyards, while it is a miracle for the aam aadmi even if he get hold of a few pieces of new currency.
PM Modi certainly owes an answer to 125 crore Indians, of which a good number are hard working middle class, on the government’s double standard to the common man and the political parties when it comes to the issue of black money.
Read the full text of Finance Minister Arun Jaitley's statement here.
Updated Date: Feb 06, 2017 14:56:56 IST