Establishing a system that ‘eliminates the scope for corruption’ was an
important promise made by the Bharatiya Janata Party in its Election
Manifesto, 2014. The methods to achieve the goal were identified as a)
Public Awareness b) Technology based e-governance c) System-based policy
driven government d) rationalization and simplification of tax regime
and e) simplification of the process and procedures at all levels. Apart
from this the party promised i) minimization of generation of black
money ii) tracking down and bringing back black money stashed in foreign
banks and offshore accounts iii) enact new laws and amend existing laws
for the purpose and iv) proactively engage with foreign governments to
obtain information on black money. These parameters are credible enough
to measure the success of the NDA government in the sphere of
eliminating corruption and recovering black money. The government,
having completed its half-life, is about to enter fourth year in office.
This makes a good occasion to assess the performance of the government.
The previous government was heavily riddled with scams and
scandals. A writ petition had been filed in the Supreme Court by Ram
Jethmalani and others in 2009 on unaccounted money from India parked
abroad. The Anna Hazare movement for Lok Pal Bill had put the government
on back foot. The UPA government thus appointed a nine member committee
headed by Chairman, Central Board of Direct Taxes in May 2011 on
measures to tackle black money in India and abroad. A white paper on
black money was published exactly after a year in May, 2012. On July 4,
2011 the Supreme Court gave an order in the Ram Jethmalani & Others
versus Union of India asking, amongst other things, for formation of a
Special Investigation Team (SIT). The UPA government tried to
unsuccessfully contest the idea SIT, managing only to delay it by three
The first decision of the NDA government was constitution of
SIT on Black Money on May 27, 2014 as per the Supreme Court order. It is
chaired by of Justice (Retd) M.B. Shah whereas Justice (Retd) Arijit
Pasayat is the vice chairman. Till date the SIT has submitted six
interim reports to the Supreme Court. Most of its recommendations have
been accepted by the government. As per its recommendation, the
government has declared cash transactions above Rs.3 lakh as illegal and
punishable under law. Another proposal, on making holding of cash above
Rs.15 lakh or above illegal is under active consideration. According to
Justice Pasayat, Rs.70,000 has been detected in black money since the
formation of the SIT, including Rs.16,000 crore stashed by Indians
Over the last three years the NDA has provided a clean government. There
has been no shadow of scams and scandals on the government. The
previous government’s second term was riddled with cases of scams and
scandals. Prime Minister Narendra Modi is not only personally seen as
incorruptible, but has kept his government on tight leash. People have
found his declaration ‘Na Khaata hoon, na khaane deta hoon’
(neither do I take bribe, nor allow others to take) reassuring.
The government has taken several legislative, administrative
and technological measures to eliminate corruption and black money.
Amongst the legislative measures the principal ones are formulation a)
Black Money (Undisclosed Foreign Income and Assets) Imposition Act, 2015
b) Benami Transactions (Prohibition) Amendment Act, 2016 c) Securities
Laws (Amendment) Act, 2014 and d) the Specified Bank Notes (Cessation of
Liabilities Act), 2017 etc.
A total of 648 disclosures involving undisclosed
foreign assets worth Rs.4164 crores were made under Black Money
(Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Similarly, the Income Disclosure Scheme (IDS) that was operative between
June 1 and September 30, 2016 led to 64275 declarations with an
aggregate of Rs.65250 crores of previously undeclared income.
India had received a third of its foreign direct investment between 2000
and 2015 via Mauritius. There was strong suspicion the island route was
being used for money laundering and round tripping of black money into
India. Thus May 11, 2016 India renegotiated its three decade old Double
Taxation Avoidance Agreement (DTAA) with Mauritius. The new taxation
regime has eliminated the scope for round tripping of funds.
Though the idea of direct benefit transfer (DBT) to
beneficiaries’ bank accounts was devised by the previous government,
most of the intended beneficiaries did not possess bank accounts and
therefore, the objective of eliminating leakage and pilferage could not
be met. However, the NDA government’s Pradhan
Mantri Jan Dhan Yojana (PMJDY)
led to enormous increase in banking cover for the poor. Till date 28.38
crore bank accounts have been opened under this scheme. This has made
DBT and electronic transfer of funds a reality for the poor unlike
before. The NDA government has pursued the Aadhar Card project with
greater zeal. While the previous government had failed to bring any
legislation on the project, this government brought a strong Aadhar Act,
2016. It is estimated that the JAM (Jan Dhan-Aadhar-Mobile) trinity will
bring complete accountability in personal transactions.
Demonetization of Rs.1000 and Rs.500 notes was a major move
towards elimination of black money by the government. It was estimated a
major chunk of black money in liquid mode was stashed in bank notes of
these two denominations. A major part of it was shed or disclosed due to
demonetization. However, a complete picture of exact effect of
demonetization on black money can only emerge when an official report is
issued by the government. Prime Minister Modi used demonetization as an
opportunity to promote cashless transactions. The government organized
several Digidhan Mela across
India, and out with mobile app BHIM (Bharat Interface for Money) based
on United Payment Interface (UPI).
Electoral funding lies at the root of political corruption.
Bringing transparency in electoral funding is also at the top of the
writer is an independent researcher and commentator.
Views expressed in the article are author’s personal.