The recent announcement by the finance ministry states that political parties can deposit demonestised notes in the party accounts without any tax scrutiny. This is akin to giving a free hand to political parties to launder black money. This step is going to haunt the government. I fail to undestand the rationale behind this step. Modi did win the perception battle in fight against black money when he announced demonetisation of 1000 and 500 rupee notes. Now, the demonetisation story is running out of steam. A good idea has been marred by faulty execution. There is no doubt that executing demonetisation in a vast country like India has its own challenges but the loopholes could have been plugged in earlier. The Jan Dhan accounts were easy targets for money laundering. The curbs which are being put on Jan Dhan Accounts now should have been put on the very first day of demonetisation.
Bankers have worked in unison with hawala operators and black money hoarders. The massive cash seizure of new notes explains the lack of due diligence. Unscrupulous bankers got a way around the banking system and laundered money. Cash crunch is here to stay till April 2017. The push for cashless economy is a welcome initiative. But the infrastructure is is still in nascent stage. Qualcomm recently said that none of payment wallets operating in India are secure. PayTM has alleged cheating to the tune of 6 lakhs by customers. Waiving off import duties on POS machines and declaring contests to promote digital payments are just ways of shifting goalposts. These Point of Sale machines are imported from China. I am wondering how nationalists would oppose this chinese product.
The surgical strike on black money is fizzling out. By allowing political parties to deposit old notes in party account without any tax implications, the government has scored a big self-goal. Political parties including BJP are averse to coming under RTI purview. The fight against black money is ineffective as long as parties are not within RTI. Transparency in election funding is needed. Election funding is the one of the major causes of accumulation of unaccounted wealth by politicians.Every penny contributed to party should be accounted for . Cash donation should be barred.
Lets hope the government does not shift goal posts and act before its too late to apologize.