It has been revealed that Indians are the world's largest keepers of money in Swiss banks with about $1.5 trillion, leave alone the unaccounted money and precious gems stashed away in lockers there or for that matter hoarded in some other tax havens around the world, including Dubai, the Caribbean or elsewhere in the world. It is also known that the parallel Indian economy is the same size as the regular economy, both about a trillion dollars a year.
Occasional tax and CBI raids sometimes bring out a few crores of rupees from business men, politicians and corrupt officials. But the size of the hoarded wealth is known to be enormous. One regional party in Karnataka has been reported to be buying votes by paying Rs. 5,000 to each voter, whereas other candidates in the fray are believed to be paying Rs. 100 or 200, leave alone bottles of liquor or dhotis and saris, but the fear of election observers keeping a watchful eye has discouraged distribution of liquor because the proof of free liquor may be easy to come by and candidates could be in trouble if they win the election. The wealth of the political system is alleged to be enormous, difficult, if not impossible, to uncover.
In the mid-1950s when the United Front government was in office for 22 months, with outside support from the Congress, P Chidambaram as Finance Minister was reported to have presented a dream budget. The highlight of this was an amnesty scheme for tax evaders to enable them to declare their unaccounted wealth and bring it into the open by paying tax at the prevailing rate- the maximum was 35 per cent and lower levels were 10 and 20 per cent. It generated much euphoria because the penalties were waived. The result was that the Government collected Rs. 10,000 crores as tax, an amount that would be considered peanuts today because direct and indirect tax collections run into lakhs of crores every year with the enormous increase in the size of the economy.
One wonders why a new amnesty scheme to bring out billions of rupees into the open is not being considered in the last year in office of the United Progressive Alliance with Dr Manmohan Singh as the Prime Minister and Chidambaram as the Finance Minister. Although the scheme was believed to be the brainchild of the then Revenue Secretary, NK Singh, now a member of the Rajya Sabha from Bihar, it could not have been announced without Congress approval and its economic wizard, the present Prime Minister.
If such an amnesty plan of waiving penalties, but not taxes were announced during the monsoon session of Parliament, the Government could hope to bring at least Rs 1 to 2 lakh crore rupees or $200 billion and collect Rs 33,000 to 66,000 crores in taxes. The large funds could finance a number of infrastructure projects as well as strengthening health and education plans for the poor, besides Bharat Nirman to connect villages with roads, midday school meals, more primary schools, child care centres, primary health centres and rural employment guarantee schemes on a much bigger scale. Public-private participation could implement power projects, national and State highways, besides encouraging public and private sector entities to aggressively acquire energy assets around the world, leave alone greater endeavor to explore and extract oil and gas offshore and onshore in India itself, besides giving a push to alternate sources of energy at a time when petroleum prices have been rising at the rate of one dollar a day per barrel for five or six weeks and threatening to touch $150, if not $200 per barrel.
Is it possible that the present government is weighing the pros and cons of a financial amnesty and is it examining in depth how terrorist and drug mafia money or criminals' funds can be kept out of such relief by inserting clauses of confiscation of undesirable money? Will the government be able to bell the cat in its final year in office? The benefits could be enormous and financial think tanks could be expected not to overlook them.
As land acquisition in India is difficult, and the Government cannot even afford to sell wasteland to private or public sector without inviting political outbursts, especially from the right as well as the left, acreage could be purchased in large countries with low populations around the world, to grow crops which will yield ethanol or energy rich weeds like jatropha, which are bitter and poisonous, but also work as pesticides. Only then could India hope to blend petrol and diesel up to 20 per cent with alcohol or other oils whereas the present effort is to blend 5 per cent of petrol only with alcohol, a byproduct of the sugar industry. Investment bankers around the world are, indeed, buying up tens of thousands of acres for precisely these uses.
India need not lag behind in such ventures.
The Chinese have announced a new technology of growing jumbo grains and vegetables to feed their 1.3 billion populations by sending seeds in space capsules and bringing them back to earth to ensure that they escape the laws of gravity and yield big crops. It is not genetic modification of seeds or GM, which is highly controversial because of the unknown health hazards, apart from the requirement of growing them in well irrigated farms, not just rain-fed parched lands. India could indeed buy such seeds from China , but could also carry out its own experiments as the technology is now known and as India is one of the world leaders in exploring space. The rising Indian population could yet have hope of escaping hunger in the future, if not in the present time as rising prices of food and basic necessities threaten widespread starvation and fears of food riots around the world and several countries have already faced them.
Lalit Sethi, -NPA
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