oppn parties Cash Deposits: Fear is Not the Key

News Snippets

  • Amidst loud attack on the government for trying to change the Constitution, PM Modi says the Constitution is Gita, Bible and Quran for the BJP government
  • PM Modi says Congress circulating meat cooking and eating videos during Navratri and the month of Savan is indicative of its 'Mughal' mindset
  • Medical journal Lancet has said that medical data from India needs more transparency for correct analysis and policy action
  • India issues advisory for citizens to refrain from travelling to Iran and Israel as conflict escalates in the Middle-East
  • Rameshwaram Cafe blast accused arrested in Bengal hid in several Kolkata lodges before going to Digha in Medinipore from where they were arrested in a joint operation by the NIA and the state police
  • AAP leader Atishi says Centre is laying the groundwork to impose President's rule in Delhi
  • Elon Musk likely to discuss Starlink too with PM Modi
  • Elon Musk likely to discuss Starlink too with PM Modi
  • Currency in circulation rose by Rs 1.3 lakh crore in one year from FY23 to FY24
  • Gold jumps to nearly Rs 74000/ 10gm on MCX
  • Retail inflation was at 5-month low in March and IIP was at 4-month high
  • Stock markets crash on Friday - Sensex tumbles 793 points to 74244 and Nifty 234 points to 22519
  • Legendary boxer Mary Kom resigns as chef-de-mission of Paris Olympics squad citing personal reasons
  • IPL: DC beat LSG by 4 wickets as Kuldeep Yadav bowls a dream spell to restrict LSG to just 167
  • Bombay HC says Senior Citizens Act not a tool to settle property disputes but a law to ensure that seniors are not treated harshly and to resotre residential rights in houses they might have gifted to their children in their lifetime
West Bengal Police helps NIA arrest two Rameshwaram Cafe blast accused from Digha
oppn parties
Cash Deposits: Fear is Not the Key

By Sunil Garodia
First publised on 2016-12-14 22:58:49

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
The crores being detected from bathrooms, bank lockers and other assorted places across the country clearly prove that when it comes to money, fear is not the key. After notebandi, various government spokesmen had created a fear psychosis that was aimed at preventing people from depositing ill-gotten wealth in the form of banned currency notes in their bank accounts. This writer had then written that perhaps this strategy would be counter-productive and might usher in inspector raj. The first has been proved true, as people have used jugaad to the full and broken their booty into small parcels (as former RBI governor Raghuram Rajan had predicted) to deposit them in benami accounts - for a charge obviously, but much less than the 50 or 85% tax the government has sought to levy. The fear of hefty fine and jail under the Benami Transactions (Prohibition) Amendment Act has failed to deter such transactions and a major amount of cash being deposited in bank accounts has been done through this route.

Both the depositor and the facilitator have no fear of being detected. The former is trying to salvage something out of the booty he or she amassed by cheating the nation while the latter is trying to make a fast buck and thinks that he can fall back upon time tested excuse of being poor to escape punishment. The brokers – entry operators having access to large numbers of return submitting income tax files where substantial cash in hand is carried forward each year – have been minting money making the two meet. This kind of situation can only arise when people know that officials can be bribed to pass their transactions as genuine. “Arre kuch nahin hoga, pakdega to paisa hi to khaega” is the normal way people think. This is the attitude the government has to change. People are also fearless as they know the government does not have the infrastructure to probe each and every bank account in which less than Rs 2.5 lakh has been deposited. In fact the way people are going about the whole thing, fear is conspicuous by its absence. That is why nearly 90% of the banned Rs 1000 and Rs 500 notes have found their way back into the banking system.

One does not know how the government is going to find a huge number of such I-T officers who cannot be bribed. The Income Tax department is a hotbed of corruption where even a peon demands money to place the file before the inspector or the officer. Orders u/s 143(1) are passed but kept in files and given to assessees only when he or she pays some money. A lot has changed since online filing of returns was introduced, but the work after demonetization will be handled not by computers but by live people who have corruption in their DNA. They are not expected to be overtaken by patriotic or nationalist feelings overnight and catch the culprits. In fact, some among them might be salivating at the thought of making good money by ‘catching’ evaders. The success or failure of demonetization and its stated objective of detecting black money and punishing cash hoarders now largely depends on how well, honestly and ethically the I-T department and Enforcement Directorate do their work.