China communist party congress to open Nov.8

White Paper for setting of Lokpal to deal with black money

The govt has tabled the much-awaited White Paper on black money in Parliament which did not disclose any name but made a strong case for setting up Lokpal and Lokayuktas to deal with the menace.

The White Paper, which was tabled by Finance Minister Pranab Mukherjee in the Lok Sabha on Monday, also did not provide government's estimate of black money, within and outside the country, though it quoted various estimates of other agencies on the issue.

The 97-page document, however, pitched for fast-track courts to expeditiously deal with financial offences and deterrent punishment for offenders.

It has also suggested tax incentives for encouraging use of debit and credit cards as these leave audit trails.

On the possibility of any tax immunity scheme, especially gold deposit scheme, to deal with black money, it said, "The issue of complete tax immunity needs to be examined in the light of other policy objectives."

The document seeks to dispel the impression that government was not doing enough to deal with black money and talks about various policy options and strategies it has been pursuing to address the issue of corruption in public life.

Referring to the issue of institutions like Lokpal and Lokayuktas, the Paper said, "(they) need to be put in place at the earliest, in the Centre and the states respectively, to expedite investigations into cases of corruption and bring the guilty to justice."

The government has not been able to push through the Lokpal Bill in Rajya Sabha, the Bill was approved by the Lok Sabha.

In order to check the menace of black money, Mukherjee in his foreward to the Paper said the government has brought five bills "the Lokpal Bill, the Judicial Accountability Bill, the Whistle Blowers Bill, the Grievance Redressal Bill and the Public Procurement Bill, which are at various stages of consideration by Parliament".

The expansion of information exchange network at the international level will help in curbing cross-border flow of illicit wealth, he said, adding "while these measures will set the tone for an equitable, transparent and a more efficient economy, there is much that we could do, both individually and collectively, to strengthen the moral fibre of our society."

The Paper suggested four-pronged strategy to curb generation of black money. These include more incentives for voluntary compliance of tax laws, reforms in vulnerable sectors of economy and creation credible deterrence.

It mentioned that reform of financial and real estate sectors would help in reducing generation of black money in long term as freeing of gold imports had helped in checking smuggling.

"Fine tuning of financial regulation remains one of the key areas in creating deterrence against generation of black money and detecting black money in the process of being laundered...Strengthening of other reporting regimes can allow appropriate systems for flagging of dubious transactions in future and improve the probability of their timely detection and prevention," it added.

In order to curb black money in the real estate sector, which accounts for 11 per cent of GDP, the Paper suggested that government should develop a nationwide data base, introduce TDS on sale of property and set up electronic payment system.