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].)