Wednesday, September 17, 2014

Special Investigation Team (SIT) on black money: actions so far.


Entertaining the request of the Indian Ministry of External Affairs, the information confirmed by Swiss Ministry of External Affairs reveals that in a ‘White Paper on Black Money in India' report, published in May 2012, the Swiss National Bank estimates that the total amount of deposits in all Swiss banks, at the end of 2010, by citizens of India were Rs 9295 crore or $2.1 billion. 
With the efforts of the new government in the formation of the SIT on black money and in revealing certain names, there seems to be a new dawn for the Indian economy and the common people. 

Sources of Black Money.

Following activities are the major sources of black money or the unaccounted illegal money:
  1. illegal trade, 
  2. smuggling, 
  3. trafficking, 
  4. terrorism, 
  5. counterfeit currency, 
  6. corruption, 
  7. arms trafficking, etc. 

Why bringing back black money has become essential?

The black money has been one of the major reason for foreign debt in India and consequentially for high fiscal deficit as the tax evasion has deeply effected Government's revenueThis has given birth to a parallel economy (it is an informal economy, in which, economic activity are neither taxed nor monitored by a government, contrasted with a formal economy) in the country, which has encouraged corruption deep in Indian society. According to certain estimates if this money is brought back:
  1. the entire foreign debt can be repaid in 24 hours. 
  2. If all the black money circulating in the economy is flowed back into the national economy of the country, there will a substantial rise in the real incomes of the people and the national income of the country. 

Journey of the SIT.

The whole journey to unearth the black money stashed abroad was initiated in 2009, when the eminent jurist and former Law Minister Ram Jethmalani and some citizens filed a writ petition in the Supreme Court to bring back the black money.

2011

  • The Supreme Court asked the Government why the names of the persons who have stashed money in the Liechtenstein Bank (Germany) have not been disclosed.
  • Same year, the SC ordered the constitution of the SIT, which was to be headed by the former Supreme Court judge B. P. Jeevan Reddy, who would also monitor the investigation.
  • This order was challenged by the Central Government, through interlocutory application. The bench consisting of Justice Altamas Kabir and S S Nijjar gave split verdict, in which the former allowed the petition, whereas the latter declined it.

2014

  • In the April month, the Government disclosed to the Supreme Court 26 names of the holders of black money in the Liechtenstein Bank (Germany), which could become possible after the German authorities complied with the Indo-German Double Taxation Avoidance Agreement signed in 1996 (Section 90 of the Income Tax Act, 1961 allows such agreement by the Government of India).
  • In the month of May, the SIT was formed by the new Central Government, with M. B. Shah, the former Supreme Court judge as its head.
  • In August, the SIT submitted its first report to the Supreme Court.

SIT empowering the Enforcement Directorate (ED).

The recent action by the SIT reveals that it has empowered the ED to share information regarding the irregularities of the exporting firms and individuals in filing their Export Outstanding (XOS) statement. This statement is compulsorily filed with the RBI, failure of which may hint the situation of foreign exchange violations or hawala dealings. 
Earlier, RBI could share this information with the Directorate of Revenue Intelligence and Customs Department. But since, the ED is the highest authority in forex sector, this empowerment by SIT was must.

Monday, September 15, 2014

Rolls Royce Era (1904 - 1969)

The flowchart has been created by me to explain which models were abolished and which were brought in place of it.
It is not the complete chart it shows the era of Rolls Royce from 1904 to 1968.
Click on the chart to enlarge it.




Saturday, September 13, 2014

Crossword Puzzle: Poverty and Economics


Across
2. Created by Max O. Lorenz in 1905 for measuring relative poverty.

3. Amartya Sen first time measured the intensity of poverty, the name of the index is called _____________ of Poverty.

4. The first Director-General of the FAO, measured the absolute poverty first time in the world in 1945.

6. First time the poverty estimate for the developing nations was done by _________ in 1990.
9. Developed by Corrado Gini in 1912 for measuring relative poverty.

Down
1. In 1962, it drew the first poverty line for India.

5. This committee on poverty estimation was appointed in 1989 and it submitted its report in 1993.

7. This committee submitted its report in 2009. It also included the factors affecting the quality of life (such as education, health, basic amenities etc.)

8. This committee was set up in 1979, which drew poverty line on the basis of nutritional requirement of rural and urban areas.