New role of Yoga Guru

Yoga guru Ramdevji has threatened to go on a hunger strike to protest against black money. Ramdevji is following activist Mr. Anna Hazare by using social network platforms to mobilise support. Around 1.5 lakh people have reportedly been mobilised by Ramdevji’s aides.

Last week, senior officials of the Central Board of Direct Taxes met Ramdevji to explain measures taken to bring black money back to the country.

The government is also amending the existing double taxation avoidance agreements with different countries and entering into tax information exchange agreements with tax havens.

Earlier too, the government had tried to get black money back through amnesty schemes.

The last such scheme was attempted by P. Chidambaram in 1997 when he was the finance minister in the H.D. Deve Gowda government.

Thank you Ramdevji. What you have tried to do was a distance dream to others since Independence. None have bothered to anything significant on this regard.

Satyameva Jayate.

Bid to assess black money

The government today commissioned a study to estimate the amount of black money held within the country and abroad. Yesterday, the government announced the setting up of a committee to strengthen laws against black money.

Three top institutions have been asked to conduct the study — the National Institute of Public Finance and Policy, the National Institute of Financial Management, and the National Council of Applied Economic Research — over a period of 18 months, an official statement released here today said.

There have been wide-ranging estimates of the amount of black money stashed abroad -— from $500 billion to $1.4 trillion, or equal to India’s gross domestic product for a year.

A recent study by the Global Financial Integrity has estimated black money parked abroad at $462 billion.

“These estimates are based on various unverifiable assumptions and approximations. The government has, therefore, commissioned these institutions to get an estimation and sense of the amount of illicit fund generated and held within and outside the country,” said the statement.

Besides assessing unaccounted wealth, the study will profile activities, identify sectors and examine systems that encourage the generation of black money and how they are converted into legal wealth.

The committee announced yesterday would study ways to prevent the transfer of black money abroad, besides recovering such assets.

The government is under immense pressure on black money from the Opposition, the civil society as well as from the Supreme Court.

Growth slows to almost 7.8%

As you all know the high level of inflation is a worrying factor.India’s growth in January-March at 7.8 per cent was the slowest in five quarters as rising prices and interest rates crimped consumption and investment. For the whole of 2010-11, the economy expanded 8.5 per cent, a shade below the finance ministry’s forecast of 8.6 per cent growth. Consumer demand has been slowing down with inflation running at over 8 per cent over the last 16 months, admit finance ministry officials. Car sales, for instance, rose just 13 per cent in April, the slowest since June 2009. India’s inflation rate, fuelled by rising food and commodity prices, is the highest after Russia among the emerging economies. The Reserve Bank of India has been trying to cool down prices by raising key policy interest rates, which sucks excess money out of the system. “The RBI will need to raise interest rates further to rein in inflation. There should actually be simultaneous fiscal and monetary measures,” said N.R. Bhanumurthy of the National Institute of Public Finance and Policy. So it now need of the hour to rein in inflation and predicted that the RBI could raise interest rates by a quarter to half per cent shortly. However, this could curb investments too!!!