The Narendra Modi-led government claims that the demonetisation move is aimed at dealing with the menace of domestic black money but the party has failed to implement study of a task force constituted by it to retrieve the black money. Instead of implementing recommendations of its own task force, the BJP-led NDA government has initiated the move of demonetisation which has unleashed chaos and confusion throughout the country.
In his Budget speech in the year 2015, Finance Minister Arun Jaitley had used the term black money 13 times and had assured to introduce stringent laws through which evasion of tax on foreign assets would attract a rigorous imprisonment of up to 10 years, at par with attempt to murder under Section 307 of the Indian Penal Code (IPC). Instead of bringing in that law, the ruling party has demonetized notes of ₹500 and ₹1000 respectively.
BJP’s task force comprising of S Gurumurthy, political and economic commentator, Ajit Doval, former Director Intelligence Bureau, who is presently National Security Advisor to Prime Minister, Prof R. Vaidyanathan, Professor of Finance Indian Institute of Management, Bangalore and Mahesh Jethmalani, Senior Advocate had recommended various steps to deal with the black money.
As far as the global strategy is concerned, the task force has recommended, “Creating a powerful public opinion and broad national consensus on the issue. Those who do not support the move should be seen as supporters of black economy. India must become a very active player in the G-20 efforts against secret banking and tax havens”.
It also suggested, “India must urge the German government to provide the details of the Indian names from the LGT bank’s secret records”.
Interestingly, the task force had promised that BJP, if voted to power, must send a special emissary to Germany, which is willing to give the details of Indian names in the LGT Bank’s secret records.
“India must strive for a coordinated global and multilateral effort, which is the only solution to undo the regime of banking secrecy. India should work with the West to get the OECD rules on internationally agreed tax standards and disclosures. India must appoint a special ambassador with adequate knowledge of tax havens and secret banking issues to work with the G-20 specifically for framing India-friendly rules,” the task force recommended.
Emphasising on devising a national strategy to deal with the menace, the task force had suggested “collection of travel information about persons visiting Switzerland and other
tax havens. This should start with cabinet ministers and other high-profile political personalities”.
It also suggested monitoring tax havens that have high transaction frequency with India and country to become a full-fledged member of the Financial Action Task Force. Use of financial intelligence sharing for security purposes.
The task force had further suggested that just as the US Administration is planning specific anti-tax haven laws, India should also target tax havens and secret destinations.
“Government should constitute a high level Task Force with representatives from Finance Ministry, National Intelligence Agencies, Ministry of Law, RBI, SEBI, Economic Intelligence Units, Central Vigilance Commission, CBI and other experts to collect and process the information and start legal action wherever feasible”.
Therefore, the question remains, what steps has the BJP government taken during the last two and half years on the recommendations of its own task force Recommendations of the task force have been mostly gathering dust while the government has gone ahead with the demonetisation move, which has created chaos in the country.