Union Budget''s 3 cousins

Among relationships in the financial world, the one between gold, black money and benami transactions is of first cousins. Arun Jaitley's Budget saw him tackling all three. His proposals on the gold monetisation scheme and indigenous gold coins may reduce the outflow of money. These and other schemes will be more successful if the fine-print does not insist on disclosing the source because many Indians who have salted away gold for hard times have not declared this wealth in their returns. Many from the countryside have never filed returns and the fear of harassment will be uppermost when they consider monetising their hoard. Jaitley should also consider a voluntary disclosure scheme of sorts.

The Budget's plans to unearth black money are interesting because of their diversity — Jaitley proposes long jail terms for hiding foreign assets, another to make PAN compulsory for costly transactions and barring offenders from the Settlement Commission. All of them may or may not work. Courts take a dim view of attempts to bar an aggrieved person from appealing to them for redressal. As for quoting of PAN for transactions over Rs 1 lakh, the salaried routinely do so, but those with unaccounted money find myriad ways not to do so. The buzz is the Jan Dhan Yojana's easy know- your-customer norms are the latest vehicle for the unscrupulous. 

The possibility of these schemes performing tepidly leads one to question their inclusion in the Budget when the accompanying laws are still to be framed. One reason may be to offset the impact of Modi's unfulfilled promise of bringing back black money from abroad. It was exploited by the Aam Aadmi Party in the Delhi elections and may haunt the BJP in Bihar where Modi first made this promise. The resolve to go after black money could whitewash this election-time promise. If the intentions are above board, Jaitley will also have to guard against overzealous inspectors inconveniencing the honest for there is ample possibility of such an eventuality especially when the Budget has given them a freer hand in other aspects.