The real challenge is to deal with corruption firmly, which has been institutionalised over the years.
The hue and cry over Central government’s demonetisation decision taken on November 8 which the countrymen came to know through Prime Minister Narendra Modi’s address to the nation, is far from over. The opposition parties led by Congress are peeved with the decision as they feel that the move has hit poor people the most. Congress has even termed the decision as the country’s biggest scam. The BJP leaders, on the other hand, are upbeat, claiming that the demonetisation move had people’s support. To buttress their point they refer to the party’s victory in recently held some municipal polls including that in Chandigarh.
It is also being said that the results of assembly polls in Punjab, Uttar Pradesh, Uttarakhand, Goa and Manipur will be a kind of referendum on demonetisation, which I feel will not be the correct assessment of repercussions or benefits of demonetisation. Whether demonetisation or not, the Congress is in electoral reckoning in Punjab. It is strongly positioned in Uttarakhand, despite recent bickering in the party, but anti-incumbency factor may see the BJP returning to power in the hill state.
It seems to be advantage BSP in Uttar Pradesh. However, the Samajwadi Party (SP) notwithstanding all upheavals will be a tough nut to crack for others. Much is not at stake for the Congress in the state, as the party has not been able to regroup itself in a manner so that the people start taking the country’s grand political entity seriously. BJP certainly stands to gain but not on account of demonetisation but because of the fact that if the people of Uttar Pradesh have to look for a third alternative after SP-Congress and BSP, then the saffron outfit remains the only option.
In Goa and Manipur, Congress remains a serious force to reckon with. Aam Aadmi Party (AAP) is confident to spring a surprise in Goa and Punjab, where the principal ruling party-Shiromani Akali Dal-has again relied heavily on the plank of development, which had surprised all pollsters in 2012 Assembly polls. It is, however, not to suggest that demonetisation might not have factored in people’s voting decision in the assembly polls held in Punjab and Goa at all. It remains to be seen whether the decision goes in favour of the BJP or others.
People in general feel that those who control India’s unorganised sector including retail segment do not pay taxes and hoard currencies, which they ultimately invest in real estate, gold and in buying benami properties. Their socio-economic and political progress becomes a matter of envy for others. A major chunk of money in old notes of Rs 1000 and Rs 500 are said to have been deposited in the banks by such people only, while the big fishes never make the mistake of keeping cash stashed in suitcases at their homes. They use and abuse different channels to secure their unaccounted money, which is also a kind of black money. We have not yet forgotten the manner in which the new notes of Rs 2,000 and Rs 500 denominations got into the hands of hoarders over-night.
Since we have failed like anything in demonetising corruption over the years, there are people who manage to monetise loopholes in the system quite easily. Post-November 8, the whole country was in serpentine queues to either deposit or withdraw or exchange old notes outside bank branches and ATM kiosks, certain people were hoarding new notes running into several crores of rupees in connivance with bank officials. It is quite upsetting to see the responsible people patronising the corrupt ones who take the system for a ride. Common men were patiently standing in queues for cash, but were also observing how things were unfolding every day post-demonetisation.
Even after 71 years of independence, we continue to monetise corruption and patronise those who share the dividends of corruption with those who call the shots in corridors of power. They are the people from all walks of life. The long hand of laws rarely touches them. Today people are a bit optimistic because the Prime Minister is talking about rooting out corruption and taking the custodians of black money to task. He may not fully succeed in his endeavours, at least he is talking quite frequently about the malaise of corruption and his determination to wipe it out from the country. Talks-whether empty or loaded-lead to some action. It will still be naïve to say that all in the BJP are happy with demonetisation. A chunk of BJP leaders must be disappointed, but they cannot utter any word against demonetisation because of the grip Prime Minister Modi has established over the party and the government. Demonetisation has exposed many important people and their political links as well, which need to be investigated.
It is interesting to note that 5.27 lakh assessees, out of 18 lakh who were sent SMS or e-mails for making suspicious deposits post demonetisation by Income Tax Department, have submitted their response, and 99.5 per cent of 5.27 lakh assessees have confirmed the amount which they have deposited as cash during 50-day demonetisation period ending December 30. These deposits were made in 7.41 lakh bank accounts. These assessees have disclosed additional 25,000 bank accounts in which cash was deposited. I-T Department is said to be elated to note that taxpayers have increased the cash deposit amount in nearly 90,000 accounts and provided details of additional 25,000 bank accounts in which cash was deposited.
Under Operation Clean Money launched on January 31, the department had sent SMS or e-mail queries to 18 lakh assessees for making suspicious cash deposits of over Rs 5 lakh and gave them 10 days’ time to reply on the e-filing portal. I-T Department has identified around 4.84 lakh taxpayers who are not yet registered with the e-filing portal and has sent SMS to them. However, we must remember the statement of Finance Minister Arun Jaitley that ours is a tax non-compliant society. Out of 125 crore Indians only 1.5 per cent or 1.9 crore pay income tax. A small fraction of Indians has to bear most of the tax burden as they earn a disproportionate share of income. There is no solution to shrinking tax base as long as 98.5 per cent of Indians don’t pay income tax.
Most of Indians are not liable to pay income tax as 93 per cent of Indian households earn less than Rs 2.50 lakh a year, which is exempted from paying tax. As 95 per cent rural households earn less than Rs 2.50 lakh annually, they do not need to pay the income tax. There are several categories of income earners like farmers who are not supposed to pay tax even if they earn more than Rs 2.50 lakh per annum. Many non-salaried professionals like doctors and lawyers pay a lower rate of income tax. In conclusion, the government must ensure those who can pay taxes must pay and do not evade taxes at all, which is not the case today.