Black money

Wednesday, February 2, 2011

There has lot of hue and cry over corruption and black money over the past few days. By some estimates, Indians have the highest quantum of black money in the world amounting to nearly USD 1.5 trillion (1.5 times the GDP of the country). Instead of talking about how did this amount was allowed to grow and which political figure or bureaucrat has the maximum amount in black let’s ask some basic questions – Is there a way to get back the money? What can be done now to stop it?

I believe that the only way to get back black money is to have a Black Money Amnesty Scheme (BMAS). This will be similar to Voluntary Disclosure of Income Scheme (VDIS) launched in mid 1997 where around INR 7,800 crores were garnered for the exchequer. The controversial part of the VDIS was that it provided immunity from prosecution to all those who had evaded taxes in the past and had opted for the scheme. But you need to make such concessions as this single act was responsible for turning INR 33,000 crores to white. BMAS will have to be a more general amnesty scheme where not just tax evaders but also people who are involved in money laundering can come clean by disclosing their wealth by paying tax. This is a bargain which we must take as there is no political will to take action against such people anyway.

For the above step to be successful we need to make sure that other ways of converting black money to white must be made difficult as it is impossible to stop it completely. Also these steps should be efficient otherwise the operational cost will go up which is not desirable.

How to prevent further money laundering -

1. PAN number must be mandatory for all transactions above INR 50,000 and this should be made through a RBI gateway. The first part is already followed in many banks. This will ensure that easy tracking of money transfers. Also the corrupt people have to make lot of payments less than 50,000 to get his or her way. This would hamper their abilities in a big way.

2. Corporate governance standards must be improved thorough independent auditing. This is already done to a certain extent by independent auditors who check the books of companies every three years. Here government can set up a regulatory body that will have constitutional backing to carry out audits anytime. This independent watch dog can deter the bribe payers from paying under the table.

3. All Government schemes where money is involved must be made public immediately to avoid over pricing. Delhi Metro Railway Corporation (DMRC) already does it and so do many other government agencies. This can be made a norm rather than an exception. At least then any one can have a look and people can easily figure out malpractices, favoritism etc.

4. Make collection of money for elections transparent. This happens in US where companies declare the election fund they are giving to different political parties. Politicians need money to win elections and hence this acts as a big driver to involve in money laundering. By making donations transparent people with charisma and not necessarily wealthy politicians will be able to bring big money into political parties and have their voices heard.

5. Investment through benami accounts must be checked. This is a primary way of converting black money into white. We must allow only trusted third parties to invest in our country or at least one must get the list of investors who are involved. SEBI has almost curbed p-notes in the stock market. Similar steps can be taken in FDI also.

Don’t want to hurt sentiments of people who follow Ramdev Baba, but his idea of stop printing high currency notes is grossly impractical and will increase the transaction cost in India by a big amount. Also printing low currency notes is a costly affair for the RBI.

Why Mumbai should learn the art of cynicism?

Saturday, December 19, 2009

It has been one year since the fateful day of 26/11. The day that many feel changed India. This was the day when the city of Mumbai was besieged by a group of ten terrorists. One year on, it is time we do some introspection about our preparedness against such attacks. But before we do that do we actually have a space for some meaningful and rational thinking? Are we focusing on the right things? I am not sure about this fact.
Many in media and elsewhere refer to the clich├ęd phrase - “Spirit of Mumbai” and talk about the resilience of the city; the city that all time is brimming with a vitality of its own. They talk about how life in this city still moves at a rapid pace come what may. I also initially joined the bandwagon that believed this city can stand up to anything. These days, the more I hear this phrase scarier I get. I think how people in this city that has been ravaged time and again by calamity (I am referring to communal violence, bomb attacks, gang wars, floods etc) be a silent spectator. The city has become immune to all that has gone wrong and is too inert, too shy, too negative and far too impotent to find answers for its own vices. Unlike many people, who think of this city resembling life in the truest sense, I feel the city has transformed into a tomb which has been ravaged by raiders many times over. This metamorphosis has been far too depressing.
Now I have come to know what is behind this apathetic state in which the city is. It is the people of this city that have an attention span of a child. The whole city was out in streets after 26/11 with the candle marches but failed to spend 15 minutes on a holiday for voting and deciding to change whatever that has gone wrong. To top it this has happened twice (in the general elections and the state assembly elections). The south Mumbai constituency which faced the maximum brunt of the terror attacks had lowest voter turnout percentagewise. Where have all the intellectuals gone? If this is the spirit of Mumbai, I am not proud about it. It is time the city becomes more cynical than resilient.

Once upon a time in Doordarshan - DD@50

Friday, October 2, 2009

Just last week I watched the video - “Mile sur mera tumhara”. Some things leave an indelible mark in your life, and this video is certainly one of them. This was a video that aptly described the concept of unity in diversity. Surely there was a time when media was an instrument to spreads communal harmony and promoting brotherhood and not about just dim-witted reality shows and breaking news. The television entertainment industry in India has come a full circle as DD completes 50 years of existence last month.
There have been other amazing things about doordarshan. Like the intellectual program called Surabhi hosted by Siddharth Kak and Renuka Shahane. Teaching diverse things like geography to culture was never so much fun. The presentation was so good that it would take a mammoth effort to recreate it. There was quality content on the show and TRP’s (if there were TRP’s then to measure the success of different shows back then) would have certainly hit the roof.
I was not part of the generation that saw (as I was not born then) ‘Buniyad’ and ‘Hum Log’ which were the bellwether serials. But I definitely liked watching Circus in which Shah Rukh Khan acted and Mahabharat, the epic that never seizes to amaze. DD had a lot to offer for everybody; from ‘Amchi mati amchi mansae’ to ‘Shaktimaan’. It was certainly the single biggest entertainment provider till the early nineties when cable TV entered the arena.
Also there were many unforgettable cricket matches that I have seen in our DD like the phenomenal test series of 2001 where India hosted Australia for 3 test matches. I vividly remember the VVS Laxman’s innings of 281 with Rahul Dravid where not a single Indian wicket was lost in the 4th day of the second test match in Kolkatta. Also in the same series where Harbhajan Singh who ended up taking 30 odd wickets in the series hit the winning run of Glenn Mcgrath by guiding the ball to the thirdman region.
I also remember some of the ads that were on display at that time as I was equally engrossed in them. ‘Humnara Bajaj’ was certainly my favourite and Cadbury’s ‘Kya swad hai zindagi mai’ comes a close second. For more such incredible ads watch the youtube links provided below.

Lately DD has sadly entered the phase of slow death where cable TV has almost entered everywhere in the country. The fancy news channels have become the staple diet of the Indian Diaspora. In the world of intense rivalry between different channels competing to catch more and more Indian eyeballs DD has lagged behind big time. The time has come to reform and revitalize this national channel.
Well I hope that DD makes a comeback and the theme music of DD - the famous Shehnai again reverberates in our homes.