We are living in a period where black money is abundant around us. At the same time, we have seen the exposed weaknesses of the government to tackle it effectively, because of many reasons. But now, when the government is facing a historically tough revenue scenario in its budget preparations, black money is an opportunity. Just introduce one amnesty scheme which allows black income holders to reveal their illegal money and allow them to convert it into white money by paying a penalty tax.
Of course, there is question from the ethical side, in giving amnesty to illegal money and its conversion to white. But, the benefits from doing so should not be underestimated in the given circumstances. First of all, without any serious effort to attach black money into the system, it continues to be disease in persistence without being treated. Again a penalty tax itself is a punishment.
The last amnesty scheme was launched sixteen years before, in 1996. That time, the government has collected Rs 10000 crores as three times that of the amount has been declared as black money. Now, the government can think of another effort on that direction, especially because of the existence of large amount of black money in the country. So far it is the CBI which has the made the lowest estimates of twenty five lakh crore rupees in India. If ten percent of that is reported and requested for conversion into white money through an amnesty scheme like the Voluntary Disclosure of Income Scheme of 1996, the government will get tax revenue of Rs. 75000 crores (with a tax rate of 30%).
The government should abandon preoccupations if any with regard to the launch of such a scheme. Because, it is nice to think that for the time being, revenue mobilization is the priority for it to survive fiscally. An amnesty scheme rightly tackles black money and helps the government to secure the revenue it badly needed. Right now, black money is a gold mine indeed.
