India needs Infrastructure development in a big way. Any amount of foreign investment will not be sufficient for the infrastructure development India need and that too in a rapid phase.
No person is without tension in safeguarding the money earned through dubious means and 60 to 75% of the people may be ready to disclose provided if it is simple and easier to do it.
Earlier attempts by the Government through voluntary disclosure schemes have not brought desired results as many people are averse to facing tax men. My intention is to unearth the money as well as to make the people comfortable in their disclosure. This will help them to come clean and to participate in Nation’s development.
The following are the excerpts taken from the Indian Express Oct 2nd 2015 – ENS economic bureau, New Delhi.
“A window was provided to tax evaders under the new law — Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 — wherein they were required to pay a penalty and tax of 30 per cent each in return for an assurance of being spared penalties and prosecution.”
“Government received details of undisclosed foreign assets worth Rs 3,770 crore from 638 declarations till September 30, the deadline for availing the opportunity under its new black money.”
“NEW DELHI: The government on Thursday said CBI chief A P Singh's statement on black money (worth Rs 24.5 lakh crore) stashed abroad was based on the report of a Supreme Court-appointed committee on black money.
Source:- Times of India dt.17.02.2012 (TNN)”
(http://timesofindia.indiatimes.com/india/CBI-chiefs-black-money-figure-based-on-SC-panels-report-says-minister/articleshow/11919183.cms)
What was admitted is 3770 Crores. That is 0.15%
The result of the scheme is not unexpected. No scheme can be successful unless the same is designed taking into account the human psychology.
In my opinion any scheme framed by CBDT will not be fruitful, as people are averse to face tax men. People suspect harassment at the hands of Tax Authorities, as they believe that, the department will not be taking the declaration given by the individuals / entities as final. More and more questions will be asked for which no satisfactory answer can be given by the assessee.
More over with the advancement of technology and a chain of transfers, it is almost impossible to trail the transactions and to pin an individual / entity to the suspected funds transfer. It involves a very high cost, labour and un-ending waiting period.
Moreover if an individual do not pass the details to their heirs about their investment in foreign banks, after his demise, it remains as unclaimed forever and Our country stand to lose the opportunity to utilise the same for the welfare of Indian citizens.
Issue of Bearer bonds also helps to avoid re-routing the funds as FDI from Tax Heavens. Once the major shake-up is done by tapping the major chunk of Black-money the strength of parallel economy comes down and the Government can take stringent preventive measures to plug the sources of creation.
It is a fact that it is not a welcome move to give amnesty to wrong doers. But still millions of people suffer with drought, floods, poverty, lack of Electricity and road connectivity and many more. There is a need for massive resources to tackle this problem. The draft scheme suggested, I hope the government will get un-imaginable quantum of funds and many useful projects can be taken-up. People will not come up and participate in the disclosure unless a) the money comes back to them, b) It is simple and easy to do without facing any statutory penalties.
Massive Infrastructure activity improves the growth rate and solves many problems like un-employment, housing, medical facilities connectivity etc.,
Central Government if it deems fit can issue bearer bonds with the caption “India Infrastructure Development (bearer) Bonds” with the permission of the Supreme court which is now taking this issue.
ADVANTAGES
- No need to approach Swiss banks, as the account holders themselves will apply for bonds
- Simple and easy way for the people to participate
- Useful for the country to use the funds for productive purposes
- Procedural hurdles are removed
- Lowest cost of funds and many more.
Scheme in brief
1. Name of the Bond: India Infrastructure Development (Bearer) Bonds (IIDB)
2. Currencies: INR, US dollar & Euro
3. Denominations:
- INR 1, 00,000 each bond
- US$ 1000 each bond
- Euro 1000 each bond
4. Format: a) Physical and b) E-Bond
5. Type of Bond: Bearer bonds
6. Lock-in-Period: 5 years
7. Repayment: 20% from 6th to 10th year
8. Interest for the first five years – Nil ( to compensate the revenue loss to the country)
9. Rate of Interest from the end of the 6th to 10th year
- 6th year: 5.0%
- 7th year: 6.0%
- 8th year to 10th - 6.5%
Rate of Interest for Foreign currencies can be decided separately.
Immunity: From Direct & In-direct taxes and also from attachment by Courts.
Tenure: 1 year from the opening of the bond Issue
Incentives: Early Bird Scheme
a. Within 30 days from the opening of the Issue of bonds 1.5%
b. Within 31 - 60 days from the opening of the Issue of bonds 1.0%
c. Within 61 - 90 days from the opening of the Issue of bonds 0.75%
d. Within 91 - 120 days from the opening of the Issue of bonds 0.50%
e. Within121 - 180 days from the opening of the Issue of bonds 0.25%
f. Above 180 days - nil
Quantitative Bonus
a. Up to INR 10 Crores or Equivalent in Foreign currency – 0.75% of the Bond value
b. INR 11 to 50 Crores or Equivalent in Foreign currency – 1.00% of the Bond value
c. INR 51 to 100 Crores or Equivalent in Foreign currency – 1.25% of the Bond value
d. INR 151 Crores & above or Equivalent in Foreign currency – 1.50% of the Bond value
E-bond: through a dedicated Payment gateway for the people to apply ( like e-deposit ) operated by the banks
1. Simple menu to capture the essential minimum details
2. Distinctive numbers with Bar-codes and scan deduction
3. High security to avoid duplicate gateways
4. Redemption will be made to the same account from where initial subscription is made for the Bonds.
5. Option to indicate any other account with bank's name, account number and IFSC / NEFT / Swift code
Physical Format:
A Central server may be established for this purpose and all the Banks and nominated branches of various banks can be connected throughout India and other selected foreign locations. Apart from the Banks selected, Post offices can also be linked to have all India presence. Amount can be collected across the table without questions and bonds can be issued right across the table using a special format with “Bar” codes with bond serial number, type of currency, denomination and the number of bonds.
For Payment of Interest and for redemption, the subscriber shall be asked to furnish their bank account number and IFSC code with their unique Bond id: OR Coupons to get the Interest and redemption amount across the counter.
Other concessions:
a. Government and Public Sector undertakings may be allowed to accept bearer bonds for EMD and Security deposits for participating tenders.
b. Banks may be allowed to take the bonds as collateral security for lending
c. Facility for assignments and transfer if it is a named one.
Other features can also be added to make the issue attractive, simple and safe for the subscriber.
There are many issues to be considered, but it is only a model that can be discussed and deliberated by the government.
Instead of force, it allows voluntary participation and put the money to productive purposes.
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