News Karnataka

News Karnataka

Can the government ever stop black money in India?

Can the government ever stop black money in India?

Guest Post Jeevan D'almeida   ¦    Feb 05, 2016 04:41:00 PM (IST)

It’s been nearly 1 year 8 months since Mr. Narendra Modi was elected as the Prime Minister of India. During his election campaign he had promised to bring back the black money stashed abroad and put Rs. 15 lakhs in the bank accounts of each and every Indian. Well I haven’t received mine. Have you?

Can the government ever stop black money in India?-1After all Modi was speaking about the black money that has been siphoned out of the country. But what about the black money that gets generated in our midst, without even the knowledge of us, the common citizens that we are generating it each and every second in the country. For most of us Indians we are not even aware about the magnitude of this problem.

I’ll give you an example of how this Black money is generated here .The other day in Mumbai I decided to have a local Mumbai snack – the Vada Pav. I went to the Vada Pav vendor and asked for a Vada Pav costing Rs 12. I observed that in a matter of 1 minute he had sold 5 Vada Pavs. Now this stall is near the Railway Station.

I just decide to do some simple math calculation and was astonished by what I discovered.  Assuming that the same amount of Vada Pavs he sold for every minute, in one hour he would have sold 300 of them. Assuming he works for 12 hours in a day he would sell around 3600 Vada Pavs generating revenue of Rs. 43200. Now, if he works all the day of the month, he would generate a revenue of Rs. 12,96,000 /- .If he were to make 15 percent of this amount for the month as profit he would get Rs. 1,94,400 / - .Assuming he has a helper whom he pays Rs. 20,000 / - , he would make Rs. 1,74,000 /- for the entire month. So for the whole year he would generate Rs.  20,88,000 /-.

Well that’s equivalent to what a senior IT professional would earn. As all his transactions are in cash there is no track of the transactions. So the Vada Pav vendor ends up getting an income of Rs. 20,88,000/- without paying a single amount as tax, which means that the entire Rs. 20,88,000 / - is nothing but black money generated.

Now, if this is the case with one vendor in one city in India, imagine this gets converted into 10 lakh vendors across the country and you would directly get a black money of Rs. 2,08,800 crore. This is pretty huge. So imagine the black money that gets generated through vegetable vendors, fruit sellers, roadside stall vendors, Raddhiwalas, shopkeepers, doctor clinics, pharmacies etc where sizeable transactions are done in cash and there is no trace of the transaction.

It is a hugely astonishing figure which no one seems to even acknowledge, forget about talking over it. I’m sure that most of you would now realize that it is just not possible to eliminate this as it has been a part and parcel of our life since our birth and we have been doing this activity without any realization of what we are doing.

The government has comfortably turned a blind eye to this which has resulted in this situation. The reason for this problem is regulation. One hope is now about mobile wallets that could change the scenario completely as mobile phone penetration is growing significantly in our country.

Another solution is M-pesa that is being used in Kenya which can definitely address this problem as it is being currently used there. The government needs to bring education to the masses about these things as using these technologies needs a basic level of education.

We need to see whether our Prime Minister, Mr. Modi can address this situation and really curb black money for the benefit of our country.