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Dr Subramanian Swamy on black money, hawala, Rafale, taxes and politics
Dr Swamy replied to a volley of questions on a wide range of issues like black money, hawala, taxation, Rafale deal, real estate registration costs and politics with his characteristic humour and candour
Dr Subramanian Swamy, arguably India's most fearless politician and a renowned economist was at his best while replying to a volley of questions ranging from black money, taxation, hawala to politics. A packed audience comprising eminent lawyers, chartered accountants, senior consultants and citizens saluted his courage to be ‘politically incorrect’ by giving him a spontaneous standing ovation. He was speaking at a seminar on the Black Money Bill organised by Moneylife Foundation in Mumbai.
Here is a selection of questions from the audience and Dr Swamy’s replies.
Anil Harish (eminent lawyer, investment and taxation expert): India historically has very high income tax rates and that was perhaps the time when  maximum amount of money went out of the country for two reasons. One to avoid tax here, what you call as evade tax, and second because foreign exchange regulations were so tight. So historically, the money had been going outside India. If one were to go through the measures you have suggested, do you not think that it will take a very long time since other countries also have voluntary disclosure schemes such as US has Fbar scheme. They are able to get in a lot of money there, I know, because many persons in the US, consulted us and they disclosed and paid the tax. Do you think the method that you have suggested will be more effective and practical than a law such as this, in terms of time and in terms of quantum of money? Because all of us are interested in the money coming back. It is much better for the country. Yet we have to find a most practical way.  
Dr Swamy: Well, the practical way should not penalise honest taxpayer. There are large number of honest taxpayers in our country, who go through great deal of harassment but still continue to pay the tax. In a sense, what you are doing is rewarding those who had violated the law. And this is not even a plea bargain. They are only going to tell us who else has the black money, many of them know. They are only going to get relief. There is no assurance they would not do it again. The trigger is to do with the fact of high tax rates. Even today, the tax rates, in my opinion, are unacceptably high. We have a need to have a much higher savings and if you abolish income tax, there would less paperwork, which is there due to the exemptions. If you abolish the income tax, then you begin the new process where fresh generation of black money is going to be discouraged as a consequence. 
Second is how much time did they take for Hosni Mubarak's accounts to be seized? They took seven months. Same thing with Gadhafi. In case of Marcos, it took a year and a half and that was 1991-92.  Things have become much tougher because of this terrorist financing, and the US is very sensitive to this. Therefore, I think we should not go for a system where we are lenient to those who broke the law. 
In India, we appear to be lenient to those who break the law to the extent that those who adhere to the law are found to be silly. It is imperative that India's black money be brought back and a big chunk of it should go into savings and investment in the Indian economy.
Black money is a severe problem and Indian can go to the extent of abolishing income tax to solve the black money problem.

Xerxes Dastur: The cost of tax collection is very high. The procedures are severe. Recently introduced 14-page Saral income tax return form (and taken back by the government for re-work/ re-design) is very complicated. The complete form for income tax return may be even more complicated. Will the government help the honest taxpayer by simplifying matters?
Dr Swamy:  There should be a national demand from the public – a national movement – to abolish income tax. It taxes predominantly urban middle class and young professional class. In rural areas, agricultural income is not taxed. Rich people anyway have chartered accountants (aside – not like the chartered accountant, who is asking the question). The ordinary taxpayer is the one who goes through hell in adhering to the law. Abolition of income tax will have a salutary effect on the rate of savings and investment in the Indian economy. Britain had done so to encourage its Industrial Revolution during the period 1816-1842.
Ameet Patel (CA & Partner, Manohar Chowdhry & Associates): The Black Money Bill asks those with black money to come forward and disclose it. The filled declaration will be treated as information and not as evidence to prosecute. Why is Prevention of Money Laundering Act (PMLA) excluded from the list of laws for which it will not be used as evidence?
Dr Swamy: Black money, which violates the Act can lead to attachment of property under PMLA. This is a powerful deterrent against generation of black money.
Question: Since there seems to be a cartel amongst all the political parties in the country, is the Black Money Bill just fire and brimstone, or will there be any tangible action?
Dr Swamy: The Bharatiya Janata Party (BJP) is not in any cartel. There will be tangible action. Even when the 2G scam was being investigated, there was a fear that it would not lead to action. Justice Ganguly and Justice Singhvi changed the whole course of the country and there has been strict action on wrongdoers. However, in the case of black money, there is no need for a public interest litigation (PIL). PIL is sustainable in Court only if the government does not perform its statutory duty or if the policy itself is arbitrary or unreasonable. When the government is working on it, courts cannot intervene. There will be action taken by the government in the black money case.
Question: In the defence purchase plan, what will you be doing about the Rafale aircraft that are going to be purchased from France?
Dr Swamy: The government has immediately responded to what I have said. The old deal as envisaged is being scrapped. It was a deal between Sonia Gandhi and Nicolas Sarkozy (then President of France). No country was buying the old Rafale aircraft, as the radar was old and the fuel consumption too high. I met Defence Minister, Manohar Parrikar, and the old deal has been closed. The bribe taken in this regard may have to be returned by the Indian wrongdoers. In the new situation, India will buy 36 aircraft, which will be built in France. It will have a new radar. It will take two years for India to acquire the modern aircraft. There is no corruption now. There will be no PIL from my end. My work is done.
Question: What is your view on black money generated in the real estate sector?
Dr Swamy: This is the toughest question. In the real estate sector, there are problems of stamp duty, and registration fees, which are paid by the public at a lower value. Undervaluation of property for this is a problem. All these government fees/ duty should be abolished. The market should be operating freely for buying and selling. If there is a major overhaul, black money will not be generated in the real estate sector.
Question: Are you disappointed with the BJP government in its handling of the black money problem?
Dr Swamy: The BJP can do the work. It does not have any of the inherent problems of the Samajwadi Party or the Congress Party. There are four years to go for the BJP government and it will go to the extent of recovering the black money. I am not disappointed now. If I am invited again next year, I will let you know if I am disappointed at that stage.
Question: Are politicians themselves involved in generating black money? Are NGOs and trusts of politicians doing these things?
Dr Swamy: That is not correct. Politicians are not doing it. Where politicians are involved in commercial transactions, the government should see if there is any wrongdoing. Let us start by generating some enthusiasm. Income tax should be abolished. The public can even be asked to donate to run the government. If we work one-step at a time, corruption will go, and black money will not be generated. 
If you ask me how many politicians, who are members of Parliament, are honest, the answer is 75%. During the elections, it is possible for money to be an issue. If the party leader gives money to the MP, at the time of election, it is a problem. If the party leader is corrupt, it is a problem. If we work on corruption and black money, the problem will be solved and honest people will be able to stand on their own feet.
Question: Is the current Finance Minister not doing enough and is he Congress-like?
Dr Swamy: The Finance Minister is a brilliant lawyer and he works hard with a different approach. The Reserve Bank of India (RBI) Governor should have been sacked for making the cost of capital so high that the manufacturing sector is affected adversely. RBI has increased interest rates to control inflation at too severe a level and this is not correct. If we say the patient’s temperature can be brought down by killing him, it is a severe approach. RBI’s inflation control measures have been severe. However, the Finance Minister is continuing with the same RBI Governor. The Finance Minister has no malafide intent and he is doing his best.
Question: Why is there no action taken against NDTV and P Chidambaram?
Dr Swamy: There is no tax evasion issue against NDTV. NDTV is not a severe case. P Chidambaram is also not being punished correctly. I have only 24 hours to work in a day. There are more severe cases like Aircel-Maxis and Swan-Etisalat deal.
Question: Has there been the hurried induction of a Judge in the SIT, who is close to Sonia Gandhi?
Dr Swamy: This is for the Supreme Court to decide. There can be custodial interrogation. The SC judges are receptive to my getting into the case. However, the court must decide. No comments from me.
Question: Is the underworld involved in the black money problem?
Dr Swamy: The underworld is not involved. There are hawala agents involved which is illegal. These agents can route the money abroad through Dubai. In Dubai, names of the Indians are revealed to banks abroad.
The Inter-Services Intelligence (ISI) of Pakistan is involved to the extent of having the information. Pakistan has an idea on which Indian politician and how much money and in which bank it is stored as black money abroad. This is dangerous to India.
The government must first arrest all the hawala agents. The government must work on the problem of money being sent abroad.
Question: There is a problem of black money within India and the government must deal with it first. What are your views?
Dr Swamy: I am outside the government. There are priorities in investment and this is because the rate of return of a business dealing in luxury items is high. On the contrary, an ordinary business generates a lower rate of return. This leads to wrong priorities and black money generation. The economic impact of black money is severe and the public must express its anger in a concrete way.
Question: Does the government need to go after the FIIs to solve the black money problem? Also, you views on the Hassan Ali case?
Dr Swamy: The answer is needed from the government and the Prime Minister. In the Hassan Ali case, the Supreme Court is looking into it. The outcome will not affect our party. It may affect friends in other parties. Is he fronting for somebody and for whom? I am not in a position to give an early response.
Question: Will there be Rs15 lakh more in everybody’s bank account, when the black money has been recovered?
Dr Swamy: This is just a joke. The Prime Minister (Narendra Modi) has not promised it. The next time I meet him, I will tell him. Two woman lawyers in the Supreme Court also asked me about this. As they were members of the Congress Party, I told them to get their share by asking Sonia Gandhi.
Question: Are co-operative banks also a part of the black money problem? Co-operative banks have dual regulation and are a common instrument in the hands of those who have black money. Many politicians have started their own co-operative bank.
Dr Swamy: Co-operative banks are a part of the problem and not the problem by themselves. When there is an epidemic, you have to go to the root of the problem. We just have a mental attitude that corruption is all right. 
This Black Money Bill is not sufficient for elimination of black money.
Question: Are religious organisations and trusts also part of the black money problem?
Dr Swamy: I am a believer in the renaissance of the Hindu religion. So far, religious organisations and trusts are not a problem. Where there are exceptions, please write to the Special Investigation Team (SIT). If you write to me, I will look into it and send it to the SIT.




2 years ago

Ref.ICL Blog > The Black Money Bill: Piecemeal and Superfluous

More thoughts since shared may be viewed on Facebook



2 years ago

Here is another 'Dr'' s view; which may (or not) be, stopping short of a 'prescription' of a 'remedy'. The only reason, as imagined, is the simplistically overwhelming enormity of the most dreaded social evil; which,at best,be regarded a plain speaking/ 'pep' talk:

The Black Money Bill: Piecemeal and Superfluous (ICL Blog)


Can anyone see, rather afford to wisely/prudently miss,- the connectivity / or inter-relationship of above < - wholly a 'money' related matter, and the quotes below*, an exclusively 'life values' related (call it, spiritual or by any other name one prefers)

*Inviting GRACE, et al - Sadhguru

> Attachment vs Love

Sadhguru says: "What is attachment? Attachment is a state of binding oneself with personal ties and bringing oneself into association with another. I believe it occurs in all relationships, when there is discomfort and fear of simply being in the moment- a fear of the unknown and of losing the love we feel. This fear propels us to attach..."

>> Become the Master of Your Own Destiny

"Create your own destiny and start with your own idea of your perfect life, including all of the things you want right now. If that includes a better fitness routine, weight loss, better health, career adjustments - even if your to-do list is long - small changes can make a big difference..."

>>> Becoming Receptive to Grace
"Grace in Christianity is the free and unmerited favour of God as manifested in the salvation of sinners and the bestowing of blessings. It is God's gift of salvation granted to sinners for their salvation. Common Christian teaching is that grace is unmerited mercy that God gave to humanity by sending his son to die on a cross..."

Ralph Rau

2 years ago

Dr Swamy loves to court controversy and enjoy the limelight. He prooves that all publicity increases "share of voice" and is therefor good publicity.

His suggestions are nothing but wishful thinking.

Prior to the election the BJP spoke wishfully about abolishing income tax and this would have made the general public more favourably inclined towards the party.

There is no reasonable basis for abolishing income and property taxes and further widening the wealth gap. It is sufficient if the tax free limit is adjusted annually to cover inflation. This way at least the aam admi will not be squeezed.

B. Yerram Raju

2 years ago

As Dr Swamy says, he is not part of the Government. If he were part, the replies would have certainly been far different.

As regards cooperative banks, they are not the source of black money. Dual regulation is often put as eliby. All the banks work under dual regulation: SEBi, RBI and even the third one, GOI in so far as public sector banks and foreign banks are concerned. The pity is, for cooperative regulators, the regulators do not understand their domains. The Registrar is not accountable to the regulations he imposes,which he hardly knows. By the time he gets to know them at the expense of the sector, he gets transferred.

Governance and management are issues in cooperatives and the sensible legislative interventions are not acceptable to any body politic in this country. Cooperatives are in irremediable situation.

Modi Government should do skill building and knowledge building of the politicians simultaneous with the skill building of youth as a top priority. The recent move to give away Rs.25cr as MPLAD fund is the surest route for black money accumulation in this country.

Rs.8.5 lakh crore to be invested in railways: Minister
Railways Minister Suresh Prabhu on Saturday said an investment of Rs.8.5 lakh crore would be made in the Indian Railways to strengthen and modernise the railway network.
Prabhu said this while addressing the gathering at the Rohtak railway station, 75 km from New Delhi, where he inaugurated the Rs.294-crore electrification of the Rohtak-Bathinda-Lehra Mohabbat rail line.
"In the past, not much investment was made on railways. Resultantly, rail and railway network, instead of strengthening, has weakened.
"In the next five years, target of electrification of 2,000 km railway line every year has been fixed which is the highest so far. The country's development is directly linked to development of railways," Prabhu said.
He said the pace of railway projects in Haryana, including the setting up of a proposed rail coach factory, will be further accelerated with an agreement for setting up a Special Purpose Vehicle (SPV) between the railway ministry and the Haryana government.
Prabhu, who was elected to the Rajya Sabha from Haryana last year, said various railway projects were being discussed for the state.


Aadhaar is a disaster, says Dr Swamy
Dr Subramanian Swamy reiterated his view that the Aadhaar numbering scheme, which is based on existing data and the software prepared by foreign companies should be scrapped
Dr Subramanian Swamy has called for scrapping the Unique Identification Authority of India (UIDAI) promoted Aadhaar numbering scheme terming it a 'disaster'.
In response to a question during a seminar organised by Moneylife Foundation in Mumbai, the Bharatiya Janata Party (BJP) leader, said, "Aadhaar is a disaster. It is based on existing data systems. Software is prepared by foreign companies. Aadhaar should be scrapped. Sooner or later, it is bound to happen.”  
Dr Swamy was asked why the BJP government was going ahead with Aadhaar and seemed to be finding back-door ways to make it mandatory, when there was a stay order by the Supreme Court and there were several serious problems with biometrics based identification. 
Dr Swamy explained how he had spoken against Aadhaar, while campaigning from BJP minister Ananth Kumar in the Bengaluru Sought constituency for the Lok Sabha elections in 2014.  Ananth Kumar’s main rival was Nandan Nilekani, the former chief of UIDAI and Congress candidate. Nilekani, a software billionaire and former head of Infosys Ltd was considered a tough candidate and it was expected that the many benefits promised by Aadhaar would work to his advantage. 
“Nilekani was contesting for the Lok Sabha election from Bengaluru and our party candidate Ananth Kumar gave me a panic call and asked me, if I would campaign for him. He said Nilekani was propagating Aadhaar and he (Kumar) did not know the technical details to demolish it. I studied it and then went for the campaigning. I gave two-three speeches, which went very well and also against Nilekani, who lost the seat,” he said.
“But then I found when the new government came in, they decided to renovate or bring it (Aadhaar) in new form. So I asked, Ananth Kumar, who had become a minister, that you made me to come and argue (against Aadhaar). Now with what face I will go and tell people that I do not know what is going on? He said, I also don’t know what is going on. So if the minister doesn’t know what’s going on then don’t blame me if I don’t know what is going on,” said Dr Swamy with a laugh. “But I certainly think that Aadhaar is a disaster,” he added.
Dr Swamy’s speeches had drawn attention to the flaws in the biometric identification scheme, which is opposed by privacy groups and on the grounds of efficacy of its identification. Dr Swamy is the first leader of the BJP to have the courage to speak his mind and stick to his stand on this issue, despite the political cost that would probably be involved. 
A study conducted by Indian Institute of Management, Ahmedabad, judged the Aadhaar scheme “the most useless” and the Standing Committee of Parliament on Finance too had echoed the same view, Dr Swamy had said. He had also said, during his campaign speeches that Nilekani ought to be prosecuted under Section 13 (1) (G)/3 of the Prevention of the Corruption Act for squandering of resources on the Aadhaar scheme.
Hearing public interest litigations (PILs), the Supreme Court, had repeatedly directed the government not to make Aadhaar number mandatory to provide social benefit to citizens. In the hearing on 16 March 2015, the Bench of Justices J Chelameswar, SA Bobde and C Nagappan also expressing dissatisfaction at defiance of Court's repeated orders by the central and state governments.




2 years ago

Really admire the foresight and brilliance of Dr. Swamy. Only few people understand the greatness of this gem.

vivek monteiro

2 years ago

Why does moneylife keep giving so much coverage to Mr. Subramaniam Swamy ? Are there not more credible persons on the subjects under discussion- like Black money, or Aadhar ?

Why is Moneylife devaluing its own credibility by citing and promoting discredited politicians like Mr. Subramaniam Swamy ?


2 years ago

We do need a good identification card that is difficult to manipulate. If AADHAAR is bad, the errors should be flagged and rectifications carried out. To a layman who has seen Voter ID cards, Ration Cards, Driving Licences, this seems to be the most sophisticated one as finger prints and the retina too are scanned and are verifiable.


2 years ago

It is amusing to say the least that Subramanian Swamy is commenting about a project that he has apparently 'studied'!!! I for one would be very much interested to know exactly what has he 'studied' of the project and its implementation. And if his creative genius as a better manner in which the Identity of an individual can be established, it would be even more welcome to hear it out!! Surely the genius that he is, he must have already thought of a great solution to all the billions of rupees that are accounted for in the subsidies!! A champion that he is for Nationalist causes, Subramanian Swamy can even publish a white paper on his analysis of the project and its purported defects for the technical community to analyse and respond. Wonder why he doesn't seem to be interested in bringing this out?! Unfortunately, mediocrity is admired and celebrated in our country and this article is just another evidence! If he has studied Biometrics and its aspects, understood the algorithms that are being employed in the project and the security features that it embeds, I wonder just how he'd have been able to rant. He is adept at beating around the bush, and his response only shows his disinclination for pursuit of knowledge let alone admit to his wonderful lack of the same!



In Reply to Praveen 2 years ago

you have put it very simple language. Why SS stopped at Ananth Kumar he should have got his doubts clarified from NaMo because NaMo has taken the seat with single aim to remove any thing remotely connected with Congress. Still NaMo has been convinced by Nilakeni the benefits of Aadhaar, definitely there must be some major good in Aadhaar.


2 years ago

Dr Swamy is paranoid and is quite infamous for spreading disinformation . He should know the difference between the software provided by world class and the software provided by " foreign companies" . AAdhar is a world class project pioneered by world class companies , in which no single company has the KEYS to alter anything . It is the single biggest initiative to reduce the drain on the perpetual drain on the exchequer . Nandan should be honoured for his work that he did pro bono , rather than he be cast in a prison . Nandan never asked for the job . He was asked to get the job done by two successive governments . It is a tribute to PM Modi that he rose above politics and saw the merits in the AAdhar scheme. So what if he lost the elections . Has Dr Swamy ever won any ?


2 years ago

at present nearly most people have aadhaar card.particularly people living permanently in other states and other areas ,because of compulsion for gas subsidy. (eventhough the court order is different ).In future without compulsion voter's ID may be replaced for new applicants for above eighteen years. If we do like this after ten or fifteen years all have aadhaar card.precautions must be taken to maintain( as per Mr. swamy's discussion on )
secracy of our citizen.

Suketu Shah

2 years ago

Dr Swamy is dead right.However one must keep in mind Aadhar was started by Congress 4 yrs ago and by the time BJP came into power Aadhar was fully implemented already.


Sandeep Khurana

In Reply to Suketu Shah 2 years ago

Aadhar is not approved by parliament and SC has also objected to it and passed directions to govt to not make it compulsory for any service. BJP is under no compulsion to continue Congress wrongs. BJP knows it well but after PM Modi invited Nilekani, he had a change of heart, and adopted Congress's brainchild, perpetuating coercion on hapless citizens, coercing them to join scheme and to expand it further from where cong left. Aadhar gives extra power to the state at the cost of citizens and no wonder once in power BJP has had a change of heart. BJP Cong r in same boat and Dr Swamy could not have been more blunt holding his own minister to the U-turn.

MG Warrier

In Reply to Sandeep Khurana 2 years ago

Aadhaar like New(National) Pension System came in without any legal backing, hanged around with support from certain vested interests and now, are being supported by government. A Government which dared to dismantle Planning Commission should have reviewed the approach to Aadhaar and NPS.

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