The fountainhead of black money lies not in distant Switzerland or Caymans, but right here under our feet
22-Oct-2014 •Dhirendra Kumar
It’s downright funny that there seems to a widespread idea in our country that there is something called black money that is lying somewhere outside the country and someone has to go and fetch it back. It’s probably true that there are a lot of very rich people who, over the years, may have taken a certain amount of money out of the country and stored it under a mattress in Switzerland or in the Caymans or somewhere like that. However, to pretend that this is the primary form of black money that exists and doing something about black money is basically about bringing it back is so obviously wrong that one can’t help but think that this is deliberate misdirection to lead the discussion astray.
The primary form of generating, storing and transferring black money is domestic real estate. The mere act of owning practically any piece of real estate in India means that you have either transacted in black, or will at some point do so. And this is not really avoidable. I know a number of people who bought apartments out of EMIs paid out of pristine white tax-paid salaries. When they needed to sell these for some reason, it proved to be impossible to do so without accepting some 50-80 per cent the payment in accounted cash. Obviously, this cash could then only be deployed further in real estate.
I actually feel a little ridiculous writing all this because I’m just wasting newsprint stating the obvious and widely known truth. This is something that every reader of this newspaper, every tax officer and every politician and do-gooder ranting about black money knows is true. If anyone is interested in doing something about black money, then this is the obvious place to start. Is anyone interested?