The news of Nagaland home minister caught with Rs 1.10 crore unaccounted cash during campaign-period for polls to state-assembly is not at all surprising. It may rather be a tip of the iceberg of numerous such incidents involving even much bigger amounts.
In the present era of money-transfer through ‘Hawala’, carrying of black money may be just a small fraction of total such amount spent in elections. What more, security-checks allow many individuals including chief ministers for air-travel without any security-check, thus allowing several political persons carrying cash without hindrance. Is such a system proper with persons like Madhu Koda having occupied the post of chief minister?
Best is to evolve a system whereby cash-transfers may be largely replaced by bank-transactions in a manner that people may find excess currency as ‘paper’ of no practical use. Notes of higher denominations of Rs 500 and 1000 are mainly used as unaccounted money. Currency in higher denominations does not exist in most of the advanced countries where most transactions take place through banks. India should also discontinue currency in denominations of Rs 500 and 1000. All expenses above say Rs 1000 including salaries must be made through crossed cheques only.
Since property-deals practically have larger share of unaccounted money than that disclosed on papers, tax-laws should be simplified by providing a permanent voluntary-declaration scheme to declare as much income as possible from ‘undisclosed sources’ on payment of maximum tax-slab of 30-percent. This will catch hold of those purchasing property from unaccounted cash when tax-persons will find ‘income from undisclosed sources’ in tax-returns of those selling the property.
Circle-rates should be somewhat higher than prevailing market-rates and should be reviewed and fixed after every three months. Stamp-duty should be charged at just two-percent of such fixed circle-rates irrespective of the deal shown on papers. Capital-gain should be reduced to ten-percent instead of present twenty-percent. Idea should be to have such low rates of stamp-duty and capital-gain so that people may volunteer themselves for clean fully accounted property-deals which in turn will give much-much more revenue than at present.