This is the
definition of Black money as per the on-line dictionary, for a minute,
let us ignore the first part, let us focus only on the second part
‘Not declared for tax purposes’, now most of the people who are
complaining /cribbing are the one’s who never thought they have to
declare their income for what ever reason.
People in this
category could be anyone, tuition teachers,
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| Tax Table for AY 2017-18 |
Drivers, Artisans, Tent
hirers, Caterers, Small eateries, Mess operator, tailors, art & craft trainers etc., there
could be thousands of categories of income earners, who never thought
it as necessary to declare their incomes either within or outside the
tax free limit. Let us assume for a minute, if only they had been
declaring their incomes, for general public without tax exemptions
there is no tax up to an income of Rs.2.5 lakhs. There are number of
exemptions, which can take your income, tax free depending on the
various savings and exempted expenditure. If they had been filing
their returns either under the within tax free category or remit
small amount as tax, just in case their incomes exceed the tax free
limit, would they have so much to crib about. They could have simply
walked in to the bank deposited their money and walk
out in style.
Coming to withdrawals, yes there is some hardship due to lack of
exchangeable currency, due to lack of smaller denomination notes and
also absence of preparedness for this announcement of demonetisation.
The queues in front
of the banks are primarily for the exchange scheme, which was meant
for people to by pass the banking system and exchange demonetised
currency to legal tender. Unfortunately the Indian jugaad, has used
this option to convert as much of their stock of demonetised currency
into legal tender by hiring help to do the job for them. We have
thousands willing to do this task for a small fee. I have seen people
like building watchmen, daily wage earners, servants etc in the queue
to exchange money for someone, who wish to be anonymous.
ATM queues are
another situation, we have new denominations and new note size,
calibration was a
must, not considered as a challenge before the
announcement or missed the attention of the think tank, ultimately,
lead to long queues and frayed tempers, when the ATMs run out of
money due to lack of legal tender.
When you hear some
of the people complaining about the delay in the queue and not having
legal tender in hand, the big question that, by passes all is, why
these people didn't wish to keep the money in the banks in the first
place. Instead of keeping the money at home (unsafe habit) if they
had kept it in FD’s and bank savings account, then their problems
would have been lot lesser. Having not done that, yes they have to
wait in the queue lines. Politicians are taking advantage of this
activity not considering the issue behind it. Netizens too are
blasting the PM ignoring the fact millions of middle class come under
category 2 of the Black money definition.
Bribe takers, tax
evaders (other taxes) all these people are finding alternate ways to
by pass the restrictions, finding ways to seek the black-sheep in the
banking system just to exchange their demonetised notes to new notes,
lack of availability of new notes is certainly hampering this
particular activity. If only 2000, 500, 100 notes were available, we
would have had many neo rich people from the banking sector.
Fast thinking politicos and business people managed to take calculated risk and bought Gold n other precious metals on the 9th & 10th. Most of those waiting for an opportunity to use their banking contacts, kind of got jacked, because of lack of availability of legal tender. Many a political party and their leaders got struck with a big apple in their throat, so best thing they have started blaming the plight of people as a reason for their opposing the demonetisation move. But alas, people didn't agree with them.
No doubt, there are hardships, people have the money but not able to use it, people celebrating marriages suddenly found themselves in awkward situations, without legal tender and not enough tax paid money in the bank. Gali janardhan Reddy might be an exemption, leading to major speculation about his spending capability.
Everyday we are reading news about money being caught in transit, Bank officials being arrested for participating in illegal exchange, Robbers running away with money waiting to be exchanged. What does it tell us, there is enough money people are not willing to just dump but trying all possible means to convert it into legal tender. Now, can we call this black money or hard earned money.
People who have been tagged and noticed as high net worth, have already changed their habits and started accounting all their major to minor expenditure and more so maybe their ability to earn is much higher and most cases tax free thanks to expert advice from tax consultants. Middle class, never assumed they have to account for their earnings, except the salaried class, who were anyway receiving TDS deducted money. That leaves us with tax evaders, bribe takers, these are the people, who are generally sitting on free money (hard earned some might still call it) now these people have been caught with their pants down, how well they can manage is to be seen. One biggest advantage for these people is, they can start all over again charging a 'CESS'.
It is going to take time for the fake note printers to get into the act, since the features that have been let out so far are only few and there are many hidden features too in the new high denomination notes and by the time fake notes start coming in, we do not know, what new steps this government will take.
Will India change and move towards a more compliant economy or continue its way of believing in cash economy, only the future will tell us and the year 2017 is going to be very exciting for all those hopefuls, nay sayers can never see anything in optimistic way, for them it will not matter.
*Some of the pictures used in this blog are taken from the Internet and the copyright of those pictures solely rests with the respective owners.
