Black money: Has Modi betrayed the voter?

To be fair, the Congress Party never made such tall claims on black money like the BJP did in the last few months. The Congress leaders have, apart from customary statements on corruption, never made the prevalence of black money in Indian economy an issue for public support or public campaign. But, the BJP leaders made it a point to identify “bringing back black money from foreign banks” as an important poll promise in all their speeches and if one were to reread statements made by PM-designate Narendra Modi and now his finance minister Arun Jaitley, one would call the government’s refusal before the Supreme Court to disclose names of people who have illegally stashed their money abroad as nothing short of betrayal.

In 1990s, when Congress government at the Centre was led by PV Narasimha Rao I recall sitting through a debate in Lok Sabha where socialist leader George Fernandes demanded that the government of the day take cognisance of the growth of black money in the country, only to see P Chidambaram stand up and speak on the virtues of a parallel economy! In fact, the Congress started a voluntary disclosure scheme where individuals and corporates were allowed to disclose wealth earned through tax avoidance, and without being penalised made to part with a bulk of that money. At the end of it the government was richer by several hundred crores and the black moneyed people were let off scot-free.

However, this has not been the case with the BJP which, in the last ten years and in particular, the last one year under Narendra Modi, has made “bringing back black money” an issue to garner public support. One has to only surf the internet for news and statements of PM-designate Modi and other BJP leaders to appreciate the importance given to the issue. After NDA’s defeat in 2004 elections it was BJP leader LK Advani, until then the second most powerful man in BJP suddenly took up the issue of black money and demanded that Manmohan Singh UPA government get back black money. Of course, he faced tough questions from media and others who wanted to know what did his government do for six years in power.

Over the years the BJP did not make much noise over the issue but, last year it again picked on the issue as one that would work well with the public. And in April this year gave it official sanction by devoting a para on black money on page five of BJP election manifesto.

This is what the BJP manifesto promised:

 “…BJP is committed to initiate the process of tracking down and bringing back black money stashed in foreign banks and offshore accounts. We will set up a task force for this purpose and to recommend amendments to existing laws or enact new laws. The process of bringing back black money to India will be put in motion on priority. We will also proactively engage with foreign governments to facilitate information sharing on black money.”

And Narendra Modi spoke extensively on the issue at one public rally after another. Sample this from his rally at Mathura on April 21: “We believe in Lord Rama’s mantra "Pran jaye, par bachan na jaye", will bring black money back from foreign banks.”

According to the government there are different estimates on quantum of black money ranging between $500 billion to $1,400 billion. A study by Global Financial Integrity has estimated the illicit money outflow to be at $462 billion.

Continuous focus on black money did not ebb once the BJP came to power either. Speaking in Lok Sabha in July before the Union Budget was passed, finance minister Arun Jaitley said, “I can assure that you don't have to wait for long to see that we have brought back the black money”.

Now what changed between July and October for the government to submit before the Supreme Court in its 800 page submission that disclosure of names would have diplomatic consequences, violate clauses of the double taxation avoidance treaty with several countries ranging from Mauritius to Bahamas, and finally lead to downgrading of India as an investment destination.

Was this not the same explanation given by UPA to the Supreme Court in 2011? Didn’t the BJP question UPA’s commitment to check black money then? The BJP government led by Narendra Modi will have to answer. Victory in Maharashtra and Haryana state elections have shown that the people want change and they are willing to bet on Modi’s leadership and for that reason it is essential for the NDA government to come clean on the matter when hearing resumes in Supreme Court after Diwali. Blaming UPA government will not help. Having made it an electoral issue the Modi government must take this to its logical conclusion and disclose names of Indians who did not pay taxes and parked country’s money in foreign banks.