It’s 1991 again and the ‘banya jugaad’ has already begun
My dad called me the morning after Prime Minister Narendra Modi announced the withdrawal of 500 and 1000 rupee notes saying that he had over 30,000 in cash and he’s going to have a big problem. I explained that the Rs. 65,000 we have between us in cash will not be a problem and it’s not us this move is targeted at but those who’ve been evading the tax net for years and have a a few more zeroes, in cash than we do.
Surely, this is the biggest, boldest move we’ve seen since the 1991 liberalization and I don’t know too many people who disagree. And yet, while the honest taxpayer is worried about implications for him or her (and frankly, other than inconvenience for a couple of weeks, there are none), those that really should be worried are hard at work, finding workarounds.
And unsurprisingly, there are already a handful being put to use:
- Visit Zaveri bazaar in Mumbai or its counterparts in any other large Indian city and you’ll see jewelers selling gold at a premium large enough for them to earn a profit even after paying 30% tax. I’m told they will buy the gold back later, at a discount, with the new 2000 rupee notes
- I saw a real estate developer offer on SMS promising up to 40% payment in cash, if we buy within the week. I don’t understand how they will move the money further but I’m sure they’re figuring it out (or have figured it out already)
- There’s always gifts to and from family members. God’s another option with donations to trusts. Next up are NGOs that do no good
From what I understand, there are a couple of other options but it’s painfully obvious that the Indian entrepreneur will do what it takes to wash his money ‘white’ but not pay his bloody share of tax. Always the loudest to complain about what the country should be doing more of for them, but doing very little to pay for it. Their sob stories about paying various other taxes all the time (other than manufacturers, I guess) are highly exaggerated cause there are workarounds there as well – just ask your family CA!
I was feeling really good about the move until I started getting calls from friends and family asking for help to deposit their cash in my account so that they don’t lose out. I guess we will do whatever it takes to not pay our share. The guy running our country is pulling out all the stops to move this country forward – for once can’t we just do what’s right?
Information Specialist
8yVeey well said, I csn see India emerging as one of the great economies.
tutor
8yyes, U R √
Professional well versed in the ins and outs of Curriculum Design and Curriculum Mapping, Design and Delivery of New Program, Skill Development Programs and Soft Skill Programs.
8yThe step I call it as a 'Big and Bold" decision. No doubt it "may " facilitate in cleaning up our country. But lets not forget this is a nation of 1.25 billion people ....persons may beat their chest and claim a lot -----as rightly mentioned below their are inconvenience - I feel with such strong team Sh. Modi could have certainly handles such critical step in a much more structured manner - point is not of bold step as I read & hear - common man do not feel it is that - one just needs to go on the street - talk to cab drivers, tea vendors, teachers etc. We do not need bold steps - we need steps which would facilitate all to be proud to be a part of Modi and his team - that is the mantra -
F&A Leader. Delivering results to Promoters. Avid Learner, Problem Solver. Supercharged Execution
8yThird legalized scam