Indians were earlier reported to be holding the highest quantum of black money stashed in the Swiss Banks and othertax havens. As per an erstwhile controversial report of the Swiss Banks’ Association, which was later disowned by theassociation as well, a figure of USD 1.4 trillion (equal to Rs. 94 trillions at today’s exchange rate) out of total USD 2.2trillion stashed in Swiss banks alone was attributed to Indians. Had it been so, the additional money stashed in other taxhavens and within India could not therefore, be less than Rs. 50 trillion. Huge sums of money have also been reportedto have been brought as export income via round tripping the black money, since FY 2011. But now, even aftercompletion of two rounds of income disclosure schemes in 2015 and 2016, the amount disclosed as unaccountedincome has hardly touched Rs. 80,000 crores, against a belief of Rs. 150 trillion. On the other hand, USD 80 billion,equivalent of Rs 5.6 trillion and USD 379 billion, equivalent of INR 25.4 trillion respectively have come to surface inArgentina and Indonesia, under their respective income disclosure schemes, as both had much lower tax and penaltyrates. The income disclosure scheme of 2015 was meant for disclosing the black money stashed abroad, at a tax liabilityof 60% with penalty, wherein mere Rs. 4174 crore i.e. little more than half a billion USD were declared. In the secondphase of 2016, money stashed within India was to be disclosed at a tax rate with penalty of 45%, but the scheme got apaltry sum of only Rs.65,250 crore, hardly touching an equivalent of USD 10 billion. All these declarations made so farare less than 15% of the declarations made in Argentina and less that 3% of the declarations made in Indonesia,concurrently. The Indian economy is 4 times larger than Argentina and 2.5 times larger than Indonesia. So the blackmoney of Indians cannot be so less. Although, as a result of searches and seizures, a sum of Rs. 87,300 crores was alsounearthed additionally. But, even after adding this amount as well, the total black money unearthed does not exceed Rs.1.7 trillion equal to mere USD 25 billion. This figure is less that 2% of what was being alleged to be with Indians in theSwiss banks alone. In case of Indonesia, around $ 140 billion out of a total declaration of $ 379 billion was declared asthe wealth stashed abroad and it has come back. Seventy percent of it was stashed in Singapore followed by
Cameron Islands and Hongkong. The black money holders in India might be holding a large part of their unaccountedwealth in the form of real estate,gold, corporate securities and benami properties, which they may have also adjustedclandestinely. But, everyone understands well that in the ensuing era of less-cash, generation of black money wouldbecome altogether difficult, because the black money can be generated only through cash transactions. Moreover, afterthe advent of Goods and Service Tax (GST), in the coming financial year, unaccounted transactions might turn to be astory of the past. The footprints of most of the unaccounted transactions would invariably become visible sooner or laterin the downstream or front end value chain of the tax evader after the advent of GST
The pace of shifting to non-cash or digital transactions is also very rapid in the country, after the demonetization drive.The BHIM app (Bharat Interface for Money) launched by the Prime Minister Narendra Modi has already beendownloaded by 10 million people, within a span of ten days. Other cashless transaction options like internet banking,debit / credit card, USSD, PAALVP, mobile wallet, bank prepaid card, point of sales mobile banking, micro ATM, andother kinds or modes of payments are gaining fast popularity. Thus, black money generation would be much difficultnow in the new era dominated by digital and online transactions. Moreover, the velocity of money in this emerging less-cash era may become swifter, to add more value to the GDP through faster turnovers
Therefore, despite all the pain, demonetization may usher the country into an era of faster transactions for biggerturnovers and greater prosperity