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My recommendations to curb black money in India.

For the time being, let’s forget the recommendations done by SIT. I have some recommendations to make! If my recommendations are implemented, the government can block many black money generating avenues! Please read and comment whether my suggestions make sense or not! You may disagree with me, but it is alright. Let’s discuss.

National portal for school and college admissions

I suggest the Government to set up a national portal for school and college admissions. All educational institutions have to conduct the admissions through this portal only. The details of the school such as number of seats, the fee, etc., to be uploaded by the concerned institutions. The fee to be paid only through online/cards using this portal. (This is a broad concept, which can be developed sensibly) It is an open secret that the institutions are taking donations/development fee in the form of cash. Through this kind of initiative, we can clean up cash business among educationalists.

No cash purchase of goods (including Jewellery) over Rs.100,000 – You may be making corrupt money or black money. But if the government blocks the avenues of spending, what you will do with the cash? (Keep it below the pillow and sleep?) It is so simple to say that all the retailers (including Jewellery shops) should sell the goods only against net banking payments or card payments! If they sell against cash, equal amount of money will be levied as penalty. Can’t this be done with ease? Of course, yes. What is required is willingness on the part of the government.

Agricultural IncomeI can quote umpteen number of cases where Income Tax assessees declare agricultural income received in cash! (To convert black money into white money, as agricultural income is exempt from tax). I can tell you, most of it is corrupt money, shown in the guise of agricultural income. So, the government should strictly insist that all agricultural produce to be sold against payments through banks, demand drafts or crossed cheques. Today, we have a new breed of banks such as ‘payment banks’ and small banks are in the offing! The intervention of technology can make this job much simpler and easier. This one master stroke of the government, will curb an easy avenue of converting black to white.

Scrap Rs.1000 and Rs.500 notes – This is what Yoga Guru Baba Ramdev is telling over a period of time. If the government is serious, why can’t they withdraw the notes of higher denomination? Well, the government is encouraging card payment or net banking. Movement of large amount of cash can happen when higher denomination notes are available. The Government can announce the withdrawal of notes and those who have the notes can go to the bank, deposit the cash in their account and withdraw in the lower denomination. This will surely shake the cash hoarders of this country. If we have to do something transformational, this kind of aggressive step has to be taken.

Market place for marriage hall bookings – Like the national portal for education, the government can insist that letting of immovable property including marriage should be done through a marketplace like bookmyshow. A large amount of black money is being spent on weddings and social events. Once a rule is imposed that the bookings are to be done through the portal and payments are to be made through net banking / cards, you will see the drama!

Election fund / donation to political parties – Charity begins at home. This proverb is meant for you Mr. Politician. Make a rule that no political party should collect cash donations. Those who are contributing to the party should pay through net banking or through cards (even if they are paying Rs.100). The political parties (exactly like AAP website) should disclose the name, address and PAN details of the donors in their website.

Discretionary powers of Inspectors/Officers – Assessment means Harassment! No departmental officer must be vested with ‘inspection’ and ‘discretionary’ powers. This is where a whole of lot corruption is happening. If an inspector from PF or Tax department comes to your office or calls you for scrutiny, it invariably leads to bribery. Remove this kind of powers. Trust the citizens and ask them to file the tax returns, labour returns through national portal. Fix the loopholes by building a seamless integration of data through robust software. (I am not joking, a superb software is developed for VAT compliance in Karnataka now)

Many some suggestions can be made or invented, provided there are listening ears and acting brains among lawmakers.

 

Thought for the day

“If you are humble nothing will touch you, neither praise nor disgrace, because you know what you are” – Mother Teresa

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]
  • j.listing

    Add donation made to temples to your list. Temple in Gujarat collected Rs. 500 crore, I am sure most s black money.

  • HV Vishwanath

    Dear sir, I find that you are really serious about what you are saying. Very remarkable – coming from an auditor/chartered accountant, because you have a very intimate knowledge of things. Kudos for an honest and concerned approach, and a most practical set of suggestions.