Shaking the system out of its cultural status is possible only if our educational institutions create a few generations of honest and morally strong people who can dare to plug numerous sources of generating illegal money
The demonetisation drive has brought in nearly 77 per cent of the old currency into the system. But, black money hoarders used several routes to exchange their old currency. After November 9, the Jan Dhan savings bank accounts have suddenly added Rs28,600 crore in deposit.
The incidents of agents’ exchanging new currency notes for old currency are coming to light. Once the black money comes to the banking system, it would not be difficult to find out the persons who possessed it. Demonetisation is a shock therapy, but not the solution. The climate which encourages black money generation has to change.
Democratic election promotes black money, which sponsors candidate right from sarpanch to lok Sabha members. Traders, contractors, corporates and middlemen put money equivalent to eight billion dollars in the 2014 lok Sabha election.
The business community expect lucrative returns on their investment and want politicians to create proper climate for generating black money. The Rs70 lakh cap on lok Sabha candidate’s campaign expenditure becomes a joke as the cost of organising a single political rally, is more than a few crores of rupees today.
Wilful defaulters dupe banks to generate black money. The gross non-performing assets (NPA) of Indian banking sector has reached 7.6 per cent, as on March 31, 2016, the highest in the last 12 years. Wilful defaulters have reportedly diverted thousands of crores of rupees of bank loans to tax havens in Cayman and Mauritius islands, which are under the CBI lens.
Over the years, the fraudsters have made a mockery of the banking system. “The major part of the NPAs and frauds is in large value accounts. A large part of such funds moves to tax havens through hawala channels, reportedly”, said former CBI Director Anil Sinha.
Ancient idol smuggling generates huge amounts of black money. The Ministry of Culture has recorded between 2000 and 2016, that thieves have stolen 101 priceless antiquities from 3,650 protected historical monuments across the country. National crime record data reveals between 2010 and 2014, that FIRs were filed for 4115 cases of cultural property theft.
Recently investigating agencies seized thousands of Indian artefacts worth $100 million from Subhash Kapoor, a former Manhattan Gallery owner. There is no account of idols stolen from Indian temples across the country in the last six decades.
Forest is one of the potential sources of black money. Forest brigand, late Veerappan smuggled out tusks and precious sandal wood worth thousands of crores of rupees from Tamil Nadu and Karnataka forests for three decades. In his life time he had killed 2000 tuskers.
Red sandals grow in the Seshachalam forest covering Chittoor and Kadappa districts of Andhra Pradesh and some parts of Tamil Nadu. In 2013 and 2014, nearly 2,000 tonnes of red sandals have been smuggled out. The cost of red sandal in international market is one crore rupee per tonne.
The Indian mining sector generates massive amounts of black money. According to a CAG report, the size of coal scam alone was Rs1.86 lakh crore. There is no estimate of minerals stolen from different mines in the past decades. Mining contractors continue to dig out far larger area than the area allocated to them.
An inestimable amount of granite is being illegally dug out from the mines and hills across the country. Nobody has estimated the loss due to illegal digging of granite across the country.
Health sector spins huge black money. In private medical colleges especially in southern States, more than 25,000 MBBS and PG seats generate Rs12,000 crore black money every year, as the seats are reportedly booked before the entrance tests in many Indian States. Private educational institutions and technical colleges mint black money by collecting huge cash donations from parents.
According to the study made by Ambit Capital Research, the size of black money in India is Rs30 lakh crore — around 20 per cent of the country’s gross domestic product. A substantial part of the black money is concentrated in the realty sector.
Realty giants lobby with Governments to get road and other infrastructure, Metro rail and bus services to the area, where they purchase land at throw away prices. Once the infrastructure comes to the areas, the realty giants generate massive black money through cash transaction.
Former Delhi Metro chairman E Sreedharan, in his report, ‘Delegating tendering and commercial powers to general managers and other operating levels of railways, said, “Cartels in procurement loot railways by Rs10,000 crore every year.” In fact, cartels exist in most of the offices to loot from procurement of goods. “There is a need to shake the system out of its cultural status”, said Sreedharan.
But, shaking the system out of its cultural status is possible if our educational institutions create a few generations of honest and morally strong people who can plug black money sources.
(The writer is a freelance commentator)