Baba Ramdev and his cohorts are enacting a made-to-order soap-opera for the story-starved TV channels. But how many of the protesters who are chanting slogans against black money understand the hurdles to recover black money? Do the protesters imagine that they are innocent of the crime themselves? Each time, you pay a bribe to an official to get your job done, you are the cause of generation of black money, however small. The same holds true for corporate, in a larger scale.
The Union Finance Minister Pranab Mukherjee within the last few of May 2011 declared the establishing of a Directorate of Criminal Investigation in the Income Tax Department to handle tax offences associated with unlawful actions and to identify crimes or scammers by searching for the flow of black money prior to, in the course of and after a felony is perpetrated.
In April 2011, the government constituted a multidisciplinary panel, composed of top authorities of various departments, to supervise and synchronize investigations into instances of money laundering and hoarding of unaccounted wealth in safe countries.
The Impact of black money
A healthy economy expands, to a large extent, on the money that comes to that country's government as tax revenue. The generation and circulation of black money causes great losses to the country's treasurer. The following are some of the other ways in which black money can affect a country's financial and social progress.
Misuse of productive resources
Black money in an economy tends to cripple the free flow of a country's resources in the right direction. It also widens the income gap. Salaried individuals, especially those in the lower rung of the corporate ladder, do not see their incomes rising unlike those in the higher echelons as it can be safely assumed that the latter group has huge sources of unaccounted income, the vindication of which comes from news reports virtually on a daily basis.
An impediment to a country's growth indicators
The presence of unaccounted money acts as a block on the right assessment of a country's progress. The assessment of a country's progress is dependent on the accurate calculation of the savings-to-income ratio and sector-wise composition of national income. The floating of black money would obscure true figures. When black money is parked in so-called safe tax havens overseas, the country also innocently becomes a ‘lender’ of capital to more advanced and wealthier nations.
Supports Criminal and Terrorist Groups
Finally, black money needs brute ‘street power’ for its protection and proliferation as well as accounting experts, liaison officers who negotiate between black money operators and political leaders. It corrupts the entire social and political fabric of a country.