One of the biggest hurdles in removing poverty from the country and in taking big strides in the area of development is the black money or the money hoarded by unscrupulous people. Black money means possessing such amount of money as would entail payment of taxes. In order to avoid paying taxes on their income, people keep the money in their homes instead of keeping it in the banks. Some of people invest such a money in the real estate. In any case they do not pay taxes on their wealth and hide the currency notes in nooks and corners of their homes. Again black money is also the money that has been earned through corrupt and illegal methods. Thus enormous money illegally or legally earned but not accounted for payment of tax becomes the catalyst for the owners to hide the money in whatever manner they can. Hoarding the money inflicts double loss to the state. Firstly, the normal tax that the owner would be required to pay under rules is not paid and secondly the huge money hoarded is not put to productive use by investing it in developmental plans of the Government. It has a compulsion with the Government to take stringent steps of unearthing the black money and thus creating conditions in which investment in developmental plans would be boosted. This could be done only by introducing financial reforms of far reaching consequences.
The second perhaps the most pressing need for the Government to bring in drastic financial reforms is the induction of fake currency notes of rupees 500 and rupees 1000 denominations now extensively in circulation. Some years ago, it was suspected that ISI was clandestinely inducting fake currency notes of above denominations in our country to cut at the roots of financial strength. As a result of many preventive measures of the Government many people were arrested on allegations of helping fake currency notes to be brought and disseminated in our country. It was recently reported that Dawood Ibrahim, the notorious smuggler of fake Indian currency had undertaken a massive mission of extensively increasing his anti-India activities. It has to be reminded that in the election manifesto of BJP, at the time of Parliamentary election in 2014 eradications of black money was among the priority tasks. In past two years the Government did take some measures to unearth black money. After issuing appeals to the public to disclose their incomes and pay the taxes, it was found that Rs 1.25 lakh crore belonging to the “corrupt” people had already been brought out in the open. But that was only the tip of the iceberg. Voices were raised in the opposition camps that the Prime Minister has not fulfilled his commitment of unearthing black money and taking the defaulters to task. We don’t think this allegation is tenable because the Modi Government has been working silently on how black money could be unearthed.
For more than six months in the past, the Government after realizing the serious damage which the clandestine induction of black money and invalid notes into the open market was bound to cause to the nation, the scheme of forestalling the nefarious activities was brought under scrutiny. The new Governor of the Reserve Bank of India finally made up his mind to deal with the situation and then the Prime Minister announced the drastic fiscal reform. Currency notes of the denominations of rupees 500 and rupees 1000 have been declared invalid after midnight of 9-10 November. The scheme of shifting over to new currency notes of these two denominations has been announced. Care has been taken so that people are not unnecessarily put to any inconvenience. In some of the essential services relaxation has been given to allow rupee 500 notes to be accepted. But up to the end of December 2016 people can deposit currency of these two denominations in their bank accounts and can also withdraw initially to a restricted limit but later on their limit too will be given relaxation. Details of the action and its fall out have already been announced in the newspapers and also in the broadcast of the Prime Minister. The point that needs to be made is that this is a very bold and courageous step taken by the Prime Minister and a very effective measure of curbing black money, hoarded money and money illegally reaching the militants and jihadis to carry forward their anti-national and anti-social mission. The entire country was taken by surprise and praises for the courage and determination of the PM are pouring in from all quarters. With this step the Prime Minister has responded to his pledge of doing whatever is possible to uproot corruption from the country. Of course some small inconvenience will be caused to the general public but that is just for 72 hours and no more. It is the duty of the people of this country to lend their full support to the Modi Government in having taken a drastic step to stem the tide of black money overtaken our society. The Prime Minister has been repeatedly appealing that people should disclose their assets and not hide money because it does great harm to the country. We are hopeful that this action will yield very favorable results and most of the black money will be busted. Kashmir terrorism is running through the black money which the jihadis and the traitors are receiving through clandestine ways. There is every possibility that curbing the fake currency notes and black money will open up the vista for development if basic infrastructure and investment in many sectors will open up.
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