Prime Minister Narendra Modi's "boastful claim" of bringing back all the black money stashed abroad "is fast turning into a farce", the CPI-M said on Thursday.Modi had promised during the Lok Sabha election to bring the lakhs of crores of rupees illegally kept abroad. He had declared that when all this money comes home, every person in India would get Rs.15 lakhs.
The government said those declaring their black money abroad by September 30 would get an amnesty and would be able to keep their money after paying 30 percent tax and a 30 percent penalty. "At the end of the three-month period, the government has got 638 declarations amounting to Rs.4,147 crores, which is not even a tiny fraction of the billions of dollars in tax havens and foreign accounts," CPI-M journal "People's Democracy" said in an editorial. "The government will get 60 percent of this Rs.4,147 crore in the form of tax and penalty which amounts to Rs.2,488 crore.
"If Modi decides to distribute this to all Indians, given the current population of 130 crore, this works out to Rs.19 per person. A very far from the Rs 15 lakh promised!"The editorial said Finance Minister Arun Jaitely was wrong to assume that black money can be eliminated by rationalising tax rates."Black money is not being generated due to high tax rates. The policies pursued by the government itself encourage tax evasion and generation of black money," the Communist Party of India-Marxist said."The Participatory Notes issued by foreign portfolio investors is one such instance. P Notes, whose source of funds are not revealed, effectively permits the return of unaccounted wealth held abroad to India.
"Yet participatory notes have not been banned. Similarly, fictitious long term capital gains are used for large scale tax evasion. "The Modi government has not cracked down on money laundering by multinational banks. Nor has it followed up vigorously with the concerned countries where details of foreign account holders are available. "A major source of black money generation is the real estate sector. The Modi government has taken no step whatsoever to curb the use of black money in this sector despite numerous suggestions and measures," it said."Despite all the bombast against black money, the real truth is that the Modi government can ill afford to act against the interests of the big capitalists, real estate speculators and big traders who not only evade taxes but also run a parallel black economy," the editorial said.