The question is if some of the money comes back what should one do with it?
The long overdue and much awaited White Paper on black money was presented by finance minister Pranab Mukherjee on Tuesday that has everyone wondering what this is all about. The document does not give details of the money stashed abroad, and by whom. According to this White Paper, available data indicates that Swiss banks have some Rs9,925 crore as at December 2010. This is much lower than the Rs23,373 crore estimated by end of 2006!
The point at stake here is that the government is dilly-dallying the issue. When talks of black money began decades ago, everyone was talking about illegal wealth by business tycoons, but no one was coming out with a possible and workable solution. I must admit, at this point of time too, there is no one final solution on the table, but we can make a start.
For the time being, let us not bother our heads with the volume involved. But, can we spend a little time, how we can bring it back to India?
This will take us to the issue what we can do with it? I propose one of the many possible solutions. What is India’s biggest problem? The problem actually is that we do not even have a list of problems identified as problems that need to be resolved sooner than later. So, we come back to zero, and start identifying the very areas that this black money can be well utilized.
What are the areas that need our urgent attention? First, let us start with power generation; it could be, preferably, solar related; wind power; nuclear, mining (coal) and hydro-electric. This will also cover extensive network of transmission lines.
The second area relates to geological surveys and search for oil and gas, shale gas and establishment of refineries, on and off shore.
Part of the black money can be diverted to investment in the above fields in countries outside India, such as Australia, Indonesia and Africa where some of the sourcing of supplies to India have been made by Indian companies themselves, by acquiring assets abroad. The only difference here could be that the black money remitter (BMR) be obliged to invest 60% of such available funds for investment in India itself.
Recent reports by Comptroller and Auditor General of India (CAG) indicated that hundreds of coal blocks were given away without due process of tendering. If this be so, all these should be nullified and system re-established which is above board.
The third area that we all know and have really done nothing about is the enormous waste of agricultural produce simply because of the lack of storage facilities. Foodgrain rot; while people starve; government postpones important decisions on export. BMR should be allowed for investment in building up such huge infrastructure facilities at various production points, like cold storages etc.
Indian Railways is the largest employer in the country and I believe we have hardly had any major laying of railroads in the country since we became a republic. Why not privatise this so called national enterprise and ensure the BMR is used for manufacturing all types of wagons and superfast engines? They may be also permitted to increase the laying of tracks (instead of single, double) to all the major cities and towns from points of production?
Our agriculture nation looks up the sky for the monsoon gods to smile every year in an adequate way. If the rains fail, we have a disaster in hand—from surplus to a begging bowl—when international prices will simply touch the roof! We therefore must direct BMR to dig up irrigational canals and huge water reservoirs at every large catchment area. This will also help fisheries.
Another area relating to the development of agriculture is the establishment of fertilizer units. Are the existing ones adequate to meet our needs two decades from now, and also provide our ability to export some 30% of our excess production to countries in Africa? What are we doing to export more vegetables to Europe and Asia which really subsist on potatoes during winter months?
Establishing gas pipelines from Iran and the new republics from erstwhile USSR are fine; just as much as we depend upon gas from Qatar, Oman or Saudi Arabia. We need to investigate the possibility of joint ownership in these areas too, and that we can achieve with BMR.
This is not an exhaustive list by any means. However, this is a start. But, let us look at the black money holder. How do we bring this prodigal home? First and foremost, we do not go witch-hunting if they come forward and surrender by transferring the entire amount to Sovereign India Overseas Account and get a code ID. Upon doing this step, they voluntarily submit 30% of the amount as tax without any question asked. Rest can be invested in the areas identified as above within two years, extending up to a maximum of five more years for completion of the project undertaken. This will enable them to do a sensible job by getting the best supplier, contractor and equipments. After this seven year period (or 10 years if the government so desires), the profits will be subject to tax like any other citizen or company in the country.
But for a start, the finance ministry must declare an amnesty by which the black money holders, whose names are known, be told that within 60 days of the announcement, that they should voluntarily declare the actual money stashed outside the country. If they do not comply with this amnesty declaration, the finance ministry must make the list public and appoint a separate judicial system, on an ad hoc basis, to handle this issue. The finance ministry has been silent on other countries which have shown willingness to co-operate on the issue. The information obtained from them must also be made public in the above manner.
Finally, I wonder why White Paper is called as such? After all, if the intention is make the black money white, why not issue it on Black Paper and call it White Conversion?
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)
A RTI reply from the Navy Headquarters to Delhi-based activist Subhash Agrawal has revealed that more than Rs23 crore was spend on the event which took place on 20 December 2011
The President’s Fleet Review (PFR) 2011, held off the Mumbai coastline, cost the Navy whopping Rs23.24 crore, a Right to Information (RTI) application has revealed.
As the president of India is the supreme commander of the armed forces, he/she is entitled to inspect his/her fleet. PFR is a traditional assembly of ships, submarines and naval aircraft (in a fly past) at anchorage, according to India Strategic. It is held once during the five year tenure of the president.
Delhi-based activists Subhash Agrawal had filed a RTI application with Navy Headquarters seeking total expenditure for the PFR 2011. It was revealed that more than Rs23 crore was spend on the event. This included expenditure under various heads such as repair of submarines, hiring of vessels, transport and casual labour; maintenance of marine assets, repair and refits of aircraft related stores, etc.
Mr Agrawal also sought information on places renovated and/or newly built for PFR 2011 along with budgetary allocation and cost involved on each of such project renovated and/or newly built.
In reply to this RTI query, Navy HQ furnished the list of such long-term infrastructure development which together cost Rs11.67 crore. Some this includes Rs1.32 crore spent on external painting of buildings and rooftops and repair of buildings;
Rs1.2 crore spent on relaying roads; Rs41 lakh on the special repairs to the road from Afghan Church to RC Church (near Navy area); Rs27 lakh for the special repair to heritage wall at INS Angre; Rs8 lakh on display board on main roads; Rs49 lakh spent on special repairs to external services and rain beating wall of certain at VIP roads and procurement of light fittings and cable, refurbishment of tower, street and security lights among others.
The RTI reply also stated that Rs26.96 lakh was spent to buy new furniture, including 30 dining tables and 60 dining chairs, furniture for VIP lounge and for cabin staff. To the question on how much cost was involved in catering for the people involved in the fleet review along with tendering process followed in providing contract for catering, it was revealed that together Rs19.68 lakh was spent on the catering. Of this, Rs17.57 lakh was spent on the catering for presidential banquet involving 960 people while Rs2.11 lakh on catering for the presidential yacht/ship involving 750 people.
According to PTI, President Pratibha Patil, undertook the fleet review on 20 December 2011, in which she took salute from a flotilla of 81 ships, including four submarines and 44 aircraft of the Navy and the Indian Coast Guard.
The market is oversold and may go up to 5,040 if the recent low hold and we see a higher high tomorrow
While the fall in the rupee and dismal global cues kept the benchmarks in the negative terrain, a small recovery in the second half helped in restricting the losses. Yesterday we had mentioned that apart from sustaining itself above the support of 4,789, the Nifty has to strongly close above the day’s high which may take it up to the level of 5,040. We continue to maintain the trend. The National Stock Exchange (NSE) saw a lower volume of 49.46 crore shares being traded.
The continuing free-fall in the rupee and negative global cues resulted in a muted opening for the domestic market. The Asian markets were negative in morning on fears of Greece preparing to exit from the Eurozone. The Nifty opened 18 points down at 4,843 and the Sensex started the day at 15,995, down 31 points from its previous close.
Meanwhile, the rupee the rupee lost 43 paise to touch a fresh low of 55.82 against the dollar in early trade due to increased capital outflows amid a strong demand for the American currency by importers, especially oil refiners. The Indian currency has not been able to show any sign of recovery despite the Reserve Bank of India’s intervention.
Selling pressure in oil & gas, FMCG, power and technology sectors kept the market in the red in subsequent trade. The market fell to the day’s low in the fore-noon session on a further fall in the rupee. At the lows, the Nifty went down to 4,804 and the Sensex dropped to 15,847.
Continuing free-fall for the sixth day in a row, rupee on Wednesday crashed to 56.13 to a dollar in intraday trade. With the downward spiral continuing, the rupee has lost over 12% since March this year.
However, value buying in select stocks resulted in a partial recovery enabling the benchmarks to touch their intraday highs. At this point the Nifty rose to 4,854 and the Sensex inched up to 16,002.
The market could not sustain the gains and once again traversed further southwards as the rupee touched a low of 56 to a dollar in noon trade and a weak opening of the European markets, ahead of an informal EU leaders meeting later today.
The range-bound market closed in the red for the second day in a row. The Nifty settled 25 points lower at 4,836 and the Sensex finished at 15,948, a cut of 78 points over its previous close.
Markets in Asia settled in the negative on concerns about the exit from the Eurozone and the Bank of Japan deciding to keep its key policy rate at a range of zero to 0.1%.
The Shanghai Composite fell 0.42%; the Hang Seng declined 1.33%; the Jakarta Composite shaved off 0.98%; the KLSE Composite fell 0.46%; the Nikkei 225 tanked 1.98%; the Straits Times dropped 1.53%; the KOPSI Composite lost 1.10% and the Taiwan Weighted settled 1.75% down.
At the time of writing, the key European indices were down between 1.70% and 2.25% and the US stock futures were sharply lower.
Back home, foreign institutional investors were net sellers of shares totalling Rs283.34 crore while domestic institutional investors were net buyers of equities aggregating Rs207.60 crore.