Let me first clarify that I am neither for nor against demonetization. Though I am not an economist, I still do not support demonetization as I believe it was not planned properly & also because a lot of common citizens have been put into needless trouble because of this. Also, while I agree that this step will address a miniscule proportion of black economy, I still feel whatever that no. is (2%, 5%, 10%), something is still better than nothing & we will end up in a better state. And for this reason, I think this should only be the 1st battle in the war against corruption.
But now that the elections in critical states are round the corner the PM is already busy with his electoral duties. So what happens when the banks are tanked up with new currency & the queues at ATM’s & bank counters diminish? To help him hit the ground running when he returns to office, here are my suggestions to our PM for the next anti-corruption measures:
Ask anyone in an ATM queue & he will inform you that the largest hoarders of cash/black money are the builders. Usually, they take around 30% to 40% of payment in cash form which may or may not be reported. I suggest, you exempt 40% of income of builders from income tax. As it is, you are not collecting any tax on this income. Same for sale of house/property too. You would then eliminate black money from the real estate sector in one shot. Which will return to the legitimate monetary system as these guys would be able to spend their hard earned money any way they like. Or they would deposit this money in banks which have more funds to lend (as home loans too!), thus fuelling the economy.
On the same lines, I would like you to exempt government officials from paying income tax. And not just because they are public servants doing public service for public welfare. Because firstly, their salaries would increase proportionately & they would have a lesser need to make ends meet by accepting dole (or, what the common man calls Bribe) from the paying public. Also because what the citizen pays these gentlemen is already taxed & as these payments have no tax liability, it no longer will be considered “black money”. Not only does this measure ensure life goes on as before, it also makes the public servants a happier lot which may make improve the service they provide (would they worry about where to dispose the cash?). Thus, a win-win solution for all.
There is another sphere of economic activity which works under the radar, known to all though no one talks about it openly. Coming from Gujarat, I am sure you would already have guessed it. Yes, I am speaking about bootlegging. These are the good Samaritans who receive no appreciation but only harassment from the official machinery. Even they should be exempt from paying income tax, because their work is almost as important to the nation as those of the farmers. I know this appears to go against the Gandhian principles which are so dear to us, but this is not the case. When these spiritual service providers feel they have nothing to fear about their wealth, they would hit the markets in a very conspicuous manner. This would inspire the unemployed youth to take up this profession, which would make it very competitive & unprofitable. There could be more desertions than addition, probably leading the industry to look at other avenues for business. Which is what Gandhi wanted.
Organised religion dabbles mostly in cash, of all denominations. All temple trusts, waqf boards, churches & the like should be forbidden from holding any bank accounts or owning land. Because if they trust god why do they need banks for safe custody of their wealth? And because god is omnipresent & all-powerful, the land owners are just tenants of god (or his representatives) & the entire land ultimately belongs to him/them. But babas & godmen are not to be considered here, because they perform other important tasks too such as producing movies, meeting parents of slain terrorists & throwing MNC’s out of business.
I would love to add another measure to the list above – No cash donations to political parties. But I know this would not be acceptable to any political party or politician. Also, if this is implemented any ordinary person can aspire to be a politician, become MLA/MP & govern the states/country. This is a scary thought & you know what I mean. You have quite a few of these types in your vicinity who are also a pain in you know what. As individuals & as citizens we cannot even self-govern. Just look at the chaos on the road when there is no traffic police around (to give an example), and you will understand what I mean. We need the politicians to rule (pls read this as: formulate & administer laws) us, whether they mend their ways or not.
You have highly competent people in your team who will come up with even better suggestions. But whatever step you take next, pls see that it has a simple name. Terms such as “demonetization” are too difficult to pronounce to have any meaningful discussion at the tea stalls & we only end up saying “Bharat Mata ki Jai”!