In the backdrop of the headline-making failure of talks with Baba Ramdev, the committee constituted by the government to examine ways to strengthen laws for curbing generation of unaccounted (black) money in the country is likely to meet this Thursday.
The committee, headed by Prakash Chandra, chairman of the Central Board of Direct Taxes, is to examine the legal and administrative framework on dealing with generation of money through illegal means. This will include some of the demands of Ramdev, such as declaring such wealth as national property, enacting/amending laws to confiscate and recover these and exemplary punishment against perpetrators. It is to give its report within six months.
The interim recommendations of a committee constituted by the Bharatiya Janata Party in 2009 had estimated the amount of black money to be between $500 billion and $1,400 billion. A current study by Global Financial Integrity estimated the present value of illicit money outflow to be $462 billion. The government has said all these estimates are based on various unverifiable assumptions and approximations. There are no reliable estimates of such money.
The government says it has a five-pronged strategy. It includes an appropriate legislative framework, joining the global campaign to track such money, setting up institutions for dealing with illicit funds, developing a system for implementation, and imparting skills to the personnel concenred. It has entered into pacts with three economic think tanks National Institute of Public Finance and Policy, National Council of Applied Economic Research and National Institute of Financial Management to arrive at an official figure.
As for the issue of tax scrutiny of the yoga gurus various wealthy trusts and their funding, a senior Central Board of Direct Taxes (CBDT) official told Business Standard the trusts operations were being conducted under Section 11 of the Income Tax Act and registered under Section 12A. He said the trusts were filing returns regularly, with the accounts having been audited. He said the department could act only if there was evidence of tax evasion or violation of registration conditions.