The fight against back money is a long drawn battle and each step will progressively help if not in totally eliminating black money but at least reducing the avenues that generate black money. By black money our definition in this case is money on which tax is not paid.
There are many steps taken so far like appointment of Special Investigation Team , Voluntary Disclosure of income scheme and the latest being demonetization. All of them may not have yielded the desired outcomes but have in a sense indicated the positive bias of the government to take decisions instead of leaving things as status quo. The next steps needed to further curb generation of black money should be more radical.
First and foremost the government must consider doing is to legalize betting. It is common knowledge that be it cricket betting or football betting or even betting on outcomes of certain events the amount of money that changes hands in cash runs into a few thousand crores. Countries like UK have legalized betting for a long time now and have established legal bookmakers who take bets on various sporting encounters , football being the most popular one. A similar system can be implemented here in India as well. Once betting is legalized it not only brings back a lot of this unaccounted cash into the system but also helps the government in collecting tax from betting operators. A case to support this horse race betting which is legal and is prevalent for a long time. If the numbers are to be noted the Karnataka government earns about 150-200 crores annually from the horse racing authorities in Bengaluru. With the popularity of cricket I am sure the money flowing into legal betting channels will be much more and so will the tax collected and all of this will not only add to the kitty of the government but will also remove the hassles for punters to bet with some shady unknown operators.
The second radical move to curb black money generation is to ensure that all agriculturists also start filling their returns. The NITI Ayog has suggested that they will want the government to start taxing all farmers but considering the current situation and the state of our farmers most of whom are marginal this does not seem to be a viable option. It should not come as a surprise that many people have misused this loophole of zero tax on farm income and hence have used to convert the money generated from other means into white money by showing it as farm income. It is a known problem and nothing has been done to stop this, a small but radical step to change this is to make it mandatory for all farmers to file their income tax returns. At least by this measure the tax authorities can question these so called farmers on their source of funds.
Will the government bite the bullet and take these radical steps is something only time can tell ....
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