Kyon ki “Black” bhi kabhi “White” tha
If you ask a common Indian about his knowledge of Switzerland, there would be two most likely answers. First, it is the most beautiful place on earth; second, it is the place where evil politicians store their black money. Both answers are very much true, but there is an element of myth attached to it. Although Switzerland is an exquisitely beautiful place, it is particularly popular in India (ironically the country that has Kashmir), thanks to the Yash Chopra movies. Similarly, there are many places in the world where one can keep his money in secret bank accounts, yet thanks to the Bofors scandal that happened in 1980s that associated Swiss-Banks with Black-money forever. We Indians have become touchy about the Black-money issue ever since. So much that even today – after 30 years – the issue of bringing back the Black-money immediately strikes a chord with us!!! It is an issue that is close to heart of every Indian. But in public life we must be beware of close-to-the-heart matters, because people can be easily allured, misguided or deceived in such cases. Thus, while Black-money remains a grim reality, however “bringing it back” is even more distant dream!!! If we understand few basics of the parallel economy driven by the Black-money, it will be clear.
Why do I need Black-money? Isn’t White good enough?
A money is white when its usage can be tracked, whereas in case of Black-money it cannot. So who gains by the transactions which are not traceable? There are three main answers – 1. Those who can save lot of tax by hiding the transaction from government 2. Those who want to use the money for illegal activities 3. Those who got the money from illegal sources or unethical means
Black to White
Most of the cases, the money that has become black, needs to be again made white – because there are a lot many things that cannot be done without white money. e.g. Let’s say there is some corporator of a locality who is also a goon and collects hafta from all shopkeepers monthly. He cannot use all that huge money directly to let’s say construct a big shopping complex in his area, because that will invite lot of troubles. So instead he starts a small company which finances an upcoming film. Now whatever money he collected as hafta through his goons; he would claim that he earned that money as profit on his film! This can be managed, because you can tear-off as many cinema tickets as you like and claim that they were sold! Thus the original black-hafta is now converted into white-profit, and now his company will ‘finance’ the upcoming shopping complex. How legitimate!!!
(By the way, if you have wondered how these days the most stupid Bollywood films are doing 100-200 Crore business in a week – and the producers make it a point to announce it loud – then the above example has some clues ;-p)
This was an oversimplified example of converting originally Black-money to White, what is commonly known as “Money laundering”. In reality it would be far far complicated and there exist numerous ways, international rackets for this. But the important message is, black money cannot stay black for long! So coming back to “bringing the Black-money back”…. there is every possibility that the money is already back!!!… entered in the mainstream economy!!!
Black to Black
The cases where the Black-money would remain Black thereafter are lesser, but they are more sinister. It means the matters where White-money simply cannot be used, in simple words illegal and/or Anti-national activities – some examples are, distributing money to voters before election, horse-trading, criminal activities, bribing for winning contracts etc. Thus, the Black-money in such matters involves dangerous players and organizations. Tracking the Black-money itself is a challenge in such cases, let alone bringing it back.
Black/White money cycle. Click to enlarge
The myth of “stashing” money abroad
For all it’s romanticism, immaturity and sensationalism of our Media and the populism of politicians, we have been fed this myth of “Black-money being stashed abroad”. This is a multilevel myth –
– First it creates the impression of stashing the money, as in it is a treasure buried in ground waiting for Indian Government to come and dig it out. In reality, it is a far more agile matter and in all likelihood a lot of that “stashed” money has entered back in our (or some other) economy.
– Second level of the myth is all accounts in places like Switzerland are illegal and with Black-money. However, it is perfectly possible to have an anonymous Bank account wherever in a legitimate way. The government has to take care that it doesn’t hurt the credibility of legitimate account holders in its pursuit of black money.
– Third and most important myth is as if all the Black-money lies in banks abroad, but in reality a much much higher amount of Black-money within India! Tracing Black-money in India should be far easier than doing it abroad under restrictions of International treaties and co-operation. Yet, both Politicians and Media want us to look away – in the direction of some foreign countries.
The missing role of Aam Aadami
Let’s be practical, what is lost is lost and bringing back the money is near impossible case! Those who have these illegal accounts outside would be the most powerful lot of India. Under these circumstances we – the common man – should set realistic expectations. I would say we should consider ourselves lucky, if the names of the illegal account holders are just disclosed. Any punishment to those account holders is out of question, after seeing Lalu, Kalmadi, Jailalita type cases.
But all is not lost. Instead of dreaming that some messiah will bring back the black money from wherever, it is better to do what is in the capacity of an individual (and there is a good lot).
In the part above, we saw 1. Money laundering (Black –> White) and 2. Illegal/Anti-national activities (Black –> Black). But we are missing (or overlooking) something important. Who at first place converts White-money to Black (White –> Black)???? Who is at root of this?
No prize for guessing, it is our very own Aam Aadmi who earns his money in the legitimate way and then lets it convert into Black. The one who signs on a pay sleep of 35,000 rs and accepts a cash of 30,000 rs…. The one who pays for the school donation of his kid in an “reputed International School” but without receipt…. The one who pays to the builder in cash because the builder wants it that way…. !!! The Aam Aadmi thus, knowingly or unknowingly, voluntarily or forcefully contributes to the generation of Black Money. After all, the Black Money was once upon a time White! The most important principle to remember is – the moment Money becomes black, it immediately goes kind of out of control. So the most practical thing possible about Black-money is not to let it create!
Whenever there comes a topic of Black-money hereafter, one should never forget two things. First, you, me and everyone else have contributed in the creation of Black-money for which we like to curse those who have hidden it away. Second, instead of asking the government about bringing back the Black-money, it is more realistic to ask what it is doing at first place to stop the generation of Black-money!
Image courtsey: Pathi Nathan, www.itimes.com
About the Author
Sandeep Patil God knows why but I have too many interests. So chances are that you and me have something in common. Let’s see… Patanjali? Chanakya? Romans? Vijaynagar? Shivaji? Renaissance? Vivekanand? Agatha Christie? Tagore? Hitchcock? S.D.Burman? Cary Grant? Satyajit Ray? Grace Kelly? Brucia la terra? Suchitra Sen? Roman Holiday? Vasantaro Deshpande? Robert de Niro? Malguena? Kishore Kumar? Osho? Hotel California? Smita Patil? Erich von Daniken? Pu La? GA? Andaz Apna Apna? Asha Bhosale? PVN Rao? … Watch this space, sooner or later you will something on similar topic
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