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Sunday, November 19, 2017

Paradise leaks

Saturday, 11 November 2017 12:41
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For the Narendra Modi-led BJP government, the revelations of Paradise leaks indicating the trail of hidden wealth of 714 Indian citizens including two top BJP leaders couldn't have come at a worse time. The government which plans to celebrate the first anniversary of 'demonetisation of currency', one of the worst economic and fiscal policies of all times, as the Black Money Day suddenly finds itself at the receiving end. Already, the government is drawing flak for the move that finally did not bring black money into scrutiny and ended up legalising all the hoarded currency barring a meagre one percent. Only Rs 17,000 crores was tracked through deposits in the banks and major reason for this is because much of black money is stored in assets or in business deals, and very little exists in cash. The government's inability to understand that black money finds its way back into the market through various kinds of investments continues explains the actions that are meagre and come in bits and pieces without a holistic assessment and a plan. In the face of a mammoth problem, the government continues to fumble and resort to knee jerk reactions every now and then. Demonetisation has been followed by GST which has not only further jeopardised the country's economy but also is likely to keep the tradition of black money and corruption alive. Now with much fanfare, the government earlier this week announced that it has been cracking down on and would be shutting up shell companies to plug black money. This is unlikely to achieve any results because the government move is not only half-baked, it is also half-hearted and selective. Merely banning shell companies would offer only a temporary relief from tax frauds. Shutting down of a handful of shell companies, while allowing others to flourish, in no way ensures that new ones will not come up. It is often also not easy to detect these shell companies because most of them are floated for a short while to manipulate accounts and evade taxes. The money transferred through them is most likely to travel fast without being traced.  Tracking black money in a country riddled with deep-rooted corruption, where corporate-political nexus is now fully entrenched with loyalist media wagging its tail like a dog, is a gigantic task. And, there lies the catch. Despite much lip sympathy, promises and oodles of propaganda, the Modi-government has been unable to come out clean on serious issues of nexus with big business firms and nepotism. Its policies have not only been started in fits and starts but are also selectively implemented. That an entire government machinery was pressed into service to defend Amit Shah's son after the exposure of his shell company to camouflage his deeds is only one of the cases that expose the hollow claims of cracking down on shell firms. It remains to be seen how it will tackle the Paradise paper leaks which have named among 714 individuals including one minister and one Member Parliament of the BJP, apart from Modi's government star brand ambassador Amitabh Bachchan, whose name also figured in the Panama paper leaks. So far, the government which leaves no opportunity to take a dig at the Congress for its notorious scams, has responded with mere silence, thus revealing that it is only selectively serious in targeting corruption and black money. This is only part of the problem. The culture of black money thrives because of a corrupt nexus between corporate world and politicians. As long as there is a lack of will, inspired perhaps by the financial reliance of the political parties on big business houses, to crackdown on this corrupt nexus, tax evasions in some form or the other through more and more innovative ways will continue. To crackdown on violators would mean the government should have the capacity and determination to track the entire chain of money and influence, not hand-pick individuals. The culture of black money is systemic. It needs a systemic planning.

 


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