oppn parties End of "Black Money Bonhomie?"

News Snippets

  • Supreme Court holds hotels liable for theft of vehicle from their parking area if parked by valet, says "owner's risk" clause is not a shield from such liability
  • Finance Minister says she is receiving feedback from many sectors that recovery is happening as there is lower stress
  • Sabarimala temple opens, but police bar the entry of women below 50 years
  • Finance Minister Nirmala Sitharaman says Air India and BPCL to be sold off by March
  • Media person Rajat Sharma resigns as DDCA president
  • Shiv Sena, NCP and Congress postpone meeting the governor of Maharashtra
  • Shiv Sena not to attend the NDA meeting on 17th November, says break up "a formality"
  • Shiv Sena says that the confidence the BJP is showing about forming the government in Maharashtra is based purely on its expectation of getting numbers through horse trading
  • Anil Ambani resigns as director of the bankrupt Reliance Communications
  • India beat Bangladesh by an innings and 150 rums inside three days in the first Test. Indian pacers excel after Mayank Agarwal's double century
  • Sena-NCP-Congress work out a common minimum programme, will form the government soon and it will last 5 years, says Sharad Pawar
  • Income Tax Appellate Tribunal upholds the decision to withdraw the charitable status of Young India, making it liable to pay Rs 145 in income tax. Rahul Gandhi and Priyanka Vadra are the majority shareholders in the company
  • CBI raids offices of Amnesty International across India
  • Supreme Court quashes NCLAT order against Arcelor Mittal and paves the way for the company to take over ailing Essar Steel
  • Finance Minister Nirmala Sitharaman says concerns of telcos will be addressed and no company will close down
Supreme Court dismisses plea for review in Rafale case, says no need for roving inquiry, maintains clean chit to government
oppn parties
End of "Black Money Bonhomie?"

By Yogendra

About the Author

Sunil Garodia Yogendra is undecided whether he wants to be a writer. So he writes to see if he can be a writer. Ha Ha
As the investigative agencies, acting in concert, tighten their net on financial wrongdoers, the “black money bonhomie,” as one unnamed regulatory officer called it, is coming under the scanner. For long have people with good network thrived on commissions from turning the black money of moneybags into “white” using a plethora of mechanisms. When the sums were small, it was managed through “entries” from small taxpayers. But post liberalization, when the sums multiplied, companies (hundreds of them to create a maze) were formed and business boomed.

But the ache din for these set of crooks seem to have changed post demonetization. When notebandi necessitated that cash hoards be deposited in bank accounts for getting new currency, past financial jugglery needed to be reversed in some cases. Also, a new set of crooks arrived on the scene who had cash in hand in their books and could deposit and convert the illicit cash of moneybags. But little did they know that investigative agencies were hot on their trail.

Having identified 331 “shell” companies and ordered action against them, the ministry of corporate affairs has shown that it means business. Regulators are working overtime to untangle the maze and bring the culprits to book. As expected, companies and people involved in businesses such as real estate, commodities, stock trading, plantation and film and television are in the forefront of such financial wrongdoing.

Although one cannot say that this action will wipe out the so-called black money conversion business, it will go a long way in smashing the bonhomie and junking oft-used mechanism. If regulators are on their toes, they can spot new mechanisms when they crop up and nip them in the bud. The need is to bring the unorganized sector that is heavily dependent on cash transactions in the mainstream of the economy so that transactions do not go unreported and taxes are paid. The introduction of GST and concerted action against black money is going to pay rich dividends in this regard.