oppn parties End of "Black Money Bonhomie?"

News Snippets

  • EMI's set to rise after the RBI hikes key policy rate
  • Calcutta HC says that the right to privacy does not end with the death of a person
  • Supreme Court says that a delayed order of preventive detention makes it invalid
  • Shashi Tharoor posts an erronous map of India in his manifesto, rectifies the error after criticism
  • Sonia Gandhi to take a call on who will be Rajasthan chief minister
  • Mallikarujun Kharge to be the new candidate to oppose Shashi Tharoor in the Congress presidential elections
  • RBI says that the September inflation rate may be higher than 7%
  • RBI hikes key rates by 50bps, downwardly revises FY23 growth rate to 7% from 7.2% earlier
  • Stocks recover well on Friday: Sensex gains 1016 points to0 57426 and Nifty 276 points to 17094
  • Mirabai Chanu wins gold easily at the National Games
  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
RBI hikes key rates by 50bps, stocks jump and recover 50% of the losses incurred in the last few session
oppn parties
End of "Black Money Bonhomie?"

By Yogendra
First publised on 2017-08-13 20:20:15

About the Author

Sunil Garodia Yogendra is freelance writer
As the investigative agencies, acting in concert, tighten their net on financial wrongdoers, the “black money bonhomie,” as one unnamed regulatory officer called it, is coming under the scanner. For long have people with good network thrived on commissions from turning the black money of moneybags into “white” using a plethora of mechanisms. When the sums were small, it was managed through “entries” from small taxpayers. But post liberalization, when the sums multiplied, companies (hundreds of them to create a maze) were formed and business boomed.

But the ache din for these set of crooks seem to have changed post demonetization. When notebandi necessitated that cash hoards be deposited in bank accounts for getting new currency, past financial jugglery needed to be reversed in some cases. Also, a new set of crooks arrived on the scene who had cash in hand in their books and could deposit and convert the illicit cash of moneybags. But little did they know that investigative agencies were hot on their trail.

Having identified 331 “shell” companies and ordered action against them, the ministry of corporate affairs has shown that it means business. Regulators are working overtime to untangle the maze and bring the culprits to book. As expected, companies and people involved in businesses such as real estate, commodities, stock trading, plantation and film and television are in the forefront of such financial wrongdoing.

Although one cannot say that this action will wipe out the so-called black money conversion business, it will go a long way in smashing the bonhomie and junking oft-used mechanism. If regulators are on their toes, they can spot new mechanisms when they crop up and nip them in the bud. The need is to bring the unorganized sector that is heavily dependent on cash transactions in the mainstream of the economy so that transactions do not go unreported and taxes are paid. The introduction of GST and concerted action against black money is going to pay rich dividends in this regard.