Black Money and a "possible" Solution

 These days there are a lot of scams involving trillions of dollars.

So what’s the solution for this ,how we are gonna end this more importantly how to prevent this from re-occurring.

So here are my views on the same.

This article will be divided in 3 parts

1.How to bring the black money back

2.How to ensure this problem will not occur in future

3.How to make better use of the above obtained money to develop India

Part -1

There are lot of anti-corruption movements going on demanding that Indian govt should get the black money back from Swiss Bank and other international banks

Q. My first question  here is do we really expect a person (an Indian) previously having a billion dollar in his Swiss Bank(Black money) a year back will have the same amount in the same account today.

A. The obvious answer is no , he might moved the money to some other account or so.

See this link for more info::

http://blogs.timesofindia.indiatimes.com/Swaminomics/entry/our-black-money-is-here-not-in-switzerland

So..................................how?

My answer is the "change the currency" .

Sounds weird? Let me explain in more detail ,also I know that this is not gonna be easy task, but this can be probable solution to prevent this problem will not occur in future.

Ok.What does that mean "change the currency"   ?

Indian Currency is Rupee(of course the symbol got changed recently).We need to change this currency to some thing new lets say it is  "Bharath Dollar" .

Now govt should announce that  on 1-1-2012 the Indian currency will be changed and all the stake holders will be notified of the same.

May be after reading the above para you are about to skip reading the rest of the post thinking its hypothetical but wait...

some time back in Europe each country had independent currency ,they all came together and formulated a single currency called EURO.May be when Euro was originated the value was very less in international market,their markets may have experienced some downturns etc....but now Euro is costlier than US Dollar.
When different countries in a continent were able to come together and achieve that ,why can`t a single country do it.Just think......

and continue reading now.......

So what should each Indian do for this?(for the currency change )

Each Indian should convert all the excessive physical cash available with him to e-cash i.e. each Indian should deposit all the money with him to some near by bank/post office  by the last but one day.

Lets take a example

Say Mr. Ram is so called billionaire with a lots of black money ,

say his property is worth $10B of and its all possible forms

1. $2B in Swiss Bank and $5B in other international banks,
2. $2B worth real estate properties i.e. land ,houses
3. $500million  worth gold and silver
4. $100million in Indian banks
5. $100million in Indian shares and bonds
6. Residual amount in some other forms

Assume for most  of his money he neither paid tax nor that money is authorized by the Govt.

1.     Amount in foreign banks

So with this scenario from 1-1-2012 the money in Swiss bank and other international bank would be nullified.

I mean to say that Indian govt issues a law to all the banks across the world  that previously held money by anyone (Indian ,non-Indian) was in rupees is no longer valid as currency has changed now.

So all the banks will warn Mr. Ram to withdraw the money before specified date else his balance would be nullified, as the bank cannot  also use the money any where else also.

Here there is 1 more case what if the money is other foreign banks is in dollars or some foreign currency?

Which is the case mostly. So in that case most countries have some mechanism of identifying each individual like US had SSN, so in our example while Mr. Ram is depositing money (assuming in dollars) into some foreign bank he need to provide to some details like his nationality etc...in this case he can`t specify as American as he don`t have associated SSN so ,he will just say he is indian,so his nationality in the database will be deemed as Indian.

So in this case all banks across the world will ask their respective Indian customers to provide their UID(I`m assuming that by the time we want to implement this idea ,UID is already in place and is similar to U.S SSN and it had already invalidated the pan cards, ration cards and voters card etc..).And bank will also tell him that bank can disclose his details to Indian Govt.

(Please don’t tell me that it will not possible, I read in a recent article that all the countries had approached Swiss bank to know how much their country`s individuals had deposits in Swiss bank and only 14 countries (including India) haven`t done any such process yet.)

So the outcome of the above if Mr. Ram’s amount in any of international banks if in INR will be brought to India, if its already in USD or so and that amount has been disclosed by Swiss bank to Indian govt and was tagged to his UID,so he needs to shows proofs for that amount else he need to pay penalty + tax /or it may result in complete case of the amount also in some cases ,and hereafter that amount was accounted.

But for this to happen India need to pay some commission to foreign banks to disclose the details and may also need support from UNO for bringing pressure on respective nation banks to disclose the same.

(a difficult thing to happen at this time, but not impossible...many countries discuss some nuclear deals and stuffs and this issue needs to be considered equally important)

To explain in more detail

Suppose you got daily bus pass on the starting of month for travelling for entire month, but in the middle of month the Bus organization said that you need to exchange all the existing bus passes with newer ones(say logo has changed etc). So all the passengers are supposed to visit Organization and exchange the bus passes, so in this way the bus company know how many active passes  it issued  today and it also says only these will be valid here after.

 So in the similar  way Indian got would know how much money is circulating  in the current currency.(at least during the start).

Also for this idea to be implemented UID project should be completed, so no need for Voter card, Pan card etc..this will inherently solve the problem of people filing taxes with multiple pan cards.

All individuals are supposed to link all their property (bank deposits in various forms and allother property against his UID). If there is some mutual fund account/demat account or some land in some owner name whose UID is not specified govt has all rights to seal that particular account/land etc..

So the above said lets go back to Mr. Ram scenario

1. He need to get his money in all international banks to some Indian bank ,or  that amount if still in international banks   will be linked to his UID for Indian taxation purposes(Also he is supposed to have some strong reason to have money abroad rather than Indian banks)

2. In the same way all the money in his Indian accounts in various forms is linked under his UID at least 1-1-2012.

Lets call this step as tagging the property against UID,while the tagging is happening the amount is validated as to how did he get it ,

1 . if its legal and proper taxes were paid its ok,

2 .  if taxes were not paid the tax would be recovered with penalty

3.   if none of the docs were supplied most of it would be ceased not the whole amount though,if the whole amount were to be ceased there is no point for him to submit here rather he can resort to some other illegal means if possible.Also while ceasing at this step (its known to be black money now) we use due dilegence so his case will prove as example to other black money holders to submit their black properties.

2.Real Estate

One may say that because of this movement I`ll convert all the physical cash to real-estate etc.....also there are lot of lands under binami names India.

So we will solve this problem in we will do it in 3 passes.

First Pass : I`ll call this pass as tagging pass.

What I mean here is govt will ask all the land lords, real estate owner who ever own some piece of land in India to tag it against their UID.

By some particular date if there exists some land which is un-tagged it will be taken over by a virtual body created govt say REO(REal estate Owner).

So in this pass all the un-accounted land in Indian becomes tagged under some valid UID,but on a whole we have owners of each square feet of land ,may it be govt or real estate brokers or land lords or common people.

But major draw back here is we have not achieved anything because of BINAMI lands, binami lands means a billionaire who has 100 acres of land will register it under his servants name, but he is the actual owner.

His servant may/may not even aware of that, because in most cases they may be ill-literate and just for 1 day meal they would have given finger prints some where on some document.

Second Pass

Govt will officially declare a black out period as mentioned  above  and govt will provide free railways to move across India, why free railways.

I`m not joking....this is because the servants/maid in the above may have a lot of property on their name deposited by their owner are scared to goto local organisation and claim the property under his name…..can now move to any part of India, and they have their UID now(even if they don’t know...in this case UID is supposed to be associated  with their finger prints) so they can know their UID and know how much property is on their name and they have all rights to exercise that property.

So Mr. Ram had some land deposited on some one else`s(other than his family members) that might be lost ,so Mr. Ram would not dare to have any binami rather than account for himself or some of his family members.

Also 1 more issue here..in villages lots of lands are under farming many farmers doesn`t even know what is income tax....they have been farming on the land which they had been doing for decades, how to deal with them, they are more over  illiterates.

Hmm..a bit complicated here.....

Every village in India having a population over 500 or so should have a govt school(primary school at least). So each teacher working in school is given a responsibly to explain at a broader level to each farmer the above scenario.

At a broader sense he will say “Mr. Farmer you have x acres of land, which you have been farming for years now you need to declare that you have this much amount of land to govt for accounting purposes and you need to collect your UID ,say him this  is replacement for your voters/ration card “that’s all.....and the teacher will take a finger print from in the acknowledge form ,so the govt now knows that our illiterate farmer is aware of what’s happening and will tag his properties.

Now again 2 cases

1.Farmer has got the land via inheritance or self owned for which there are proper documents i.e. the land is registered on his name or his fore-father and he got this via inheritance(it is possible that he may not have any docs but the govt offices have it...even then its okay)
2.Farmer does not have any docs,but he is farming for years. Here the comes the concept of Kabjah(forcefully taking away land from others).

So in the first case there is no much problem just that he may not be paying proper income tax or he is violating land ceiling act of India( owing more than 100 acres of land or so), in both cases  some amount of land will be taken by REO(virtual govt body for real estate) for tax +penalty.

In the second case as he doesn’t have any supporting docs no one can be sure of what’s happening here...and this will be addressed in third pass

Third Pass

By now all the land in India has been tagged under some UID,now there is a problem multiple people claiming the same piece of land(assume in the initial passes this behavior is accepted).

So going back to case-2 of Second pass i.e. "2.Farmer doesn’t have any docs,but he is farming for years. Here the comes the concept of Kabjah(forcefully taking away land from others)."

In this case govt needs to see 2 things

a. The farmer under is consideration is the sole owner or

b. there are others claiming this property.

So now conflict resolution needs to be done(Hmm...there are thousands of cases in the courts on the same issue )

Consider a case here some landlord or politician or some big guy has taken over some common people land and started using for his own uses without proper docs,the case is court just because he had some strong lawyers, in this our software tells us this land had been owned by the common people name and penalizes land lord for the same. So all this problems will be solved with perfect computerisation,you may tell that one can tamper the computer records manually...for this software was designed intelligently it will have logging of all such actions, say if the land lord who ceased the land approached some registrar office and bribes some official there to tamper the records, the official firstly may not have permission to do so even if he does, his higher authority can view a log in which it says this registrar office employee had  tempered this record and he will punished for this. So for the land lord to acquire such piece of land in this cases is required to bribe all the politicians way till PM,and even then we have RTI right to information when some educated person can bring out the facts. So after all this we assume conflicts can be resolved.

If the farmer is sole owner of the land we tag him against his name and we penalize him more with tax+ penalty + extra fine for not having proper docs and here after this land is tagged against him with proper tags.

So on a whole by the end of third pass we assume govt ended with lots of hectares land which previously was black money or unaccounted money.

3.Gold and Silver

So in the same way we need to tag gold,silver,diamonds..i.e. each person is supposed to declare how much gold/silver/diamonds he has to govt, and after that govt will have full authority to ride any Indian`s house and if its finds more than declared gold/silver etc...it can be ceased. We also advice all Indians to deposit their gold in bank locker as a part they are depositing their physical cash.

You may well ask me that riding process can even happen now, I agree, but at  this point only riding needs to happen for gold and silver where as in the current scenario when IT raids happen they happen for all forms of property.

A task is a bit simpler after the above process is implemented. Also 1 more interesting outcome of this is Mr. Ram declared he has 1kg of gold in house(but he had 2 kgs of gold) and one night there was theft in his house and he lost all the gold he cant complain in the police station saying he lost 2kgs of gold, in this case even if police find 2kgs of gold they  will return less than 1kg as some amount of gold will be taken for not declaring all the gold.

Also govt will well inform all the Indians saying if you tag all you property before some dead line the penalties would be nominal  (i.e. total amount will not be taken back) but if govt finds it via some IT raids etc...then it will cease all the undeclared amount + some extra amount .In the above example if you declare 2kg of gold you may lose 0.5 kgs towards to taxes and penalties ,but if you don’t declare you may tend to lose 1.5kg.

4.Indian banks

All this will be taken as per the above process.

5.Equity

This field is already progressing now ,they had mandated pan cards for all this mutual fund /shares transactions in India.With UID already the multiple pan card issue was addressed. Once the above said things are done ,black money in this form will be taken care.

So in this way money in all the forms had been accounted for even for residual money eventually .

So for this to happen lots of processing from the govt side and all this would be done software  be careful to outsource the software and its maintenance to some foreign company :( else there may be match fixing again.

Part-2

Now how to make sure this problems of black money will not occur in future

Repeat above the process for every 25 every years...he he just kidding...

With perfect computerisation there is no place for binami lands,land kabjah(forceful taking of the land),

For all most all transactions will be tagged with UID and with frequent IT raids there is no much scope for black money let be take 1 more example and explain

Now take Mr. Raj who is a software engineer who submits fake medical,HRA,lta and some other misc bills.

What’s the main motive for him to do...he is paying huge tax (up to 30%)

 and as per wiki http://en.wikipedia.org/wiki/Income_tax_in_India only 33 million pay tax of 1.2billion population

so if the percentage of tax payer increases the tax slabs may well decrease. As per recent statistics whenever the Indian govt decreases tax slabs the amount from income tax increases, as more people tend to pay tax.

Also if you know every one in India pays tax you may be more willing to pay tax and that`s  also lesser amount than one used to pay before, so more people tend to pay tax now

okay leave heuristics coming to implementation point

Now all the employees in  India (includes software ,teachers and all other salary taking employees)   would be  asked  for UID of the owner if they are living in a rented house.

And what ever HRA amount the individual claims will be exempted for employee and this income would be added to Owners financial docs, so the owner is supposed to pay tax for this.

Definitely no Indian house owner wants this, then he may say I`ll not rent my house for salaried class, which is a definitely risk for him.

On the other hand all the land in India has been tagged now ,so all the owners who are renting their house need to provide the rental receipts. If there is a tenant assume a business person staying in a house which is of not his own, if he does not have rental receipts for the same else he can be penalized(and we assume here after there is a separate body which does this raids stuff).

So in 1 way or other all the HRA amount across India will accounted for, and in the same way all real estate transactions should be proceeded via nationalized banks  and either party should have a bank account so the banks account which were tagged UIDs know how much inflow and outflow is there.(and this particular issue that all real estate transactions thru banks was successfully implemented in some of the state in India, so not very difficult thing to do).

This is 1 example of course the main example, in this way all the domains can be taken care.

Just think being a software engineer I put up this many solutions, if more brilliant minds come together it can be huge success.

Part-3

So in this way system is coming to a perfection and we are ensuring that also.

So what are we planning to do with the black money we got, its suddenly like govt has lots of money.

This money can be divided into some domains say

1.Unemployment and poverty

2.Development

3.Others(Some economist should fill in here )

I feel unemployment and poverty go hand in hand in most cases(not all though)  I mean Unemployment leads to poverty.

So the govt has huge money and lands now govt can lease(only lease) some land to some unemployed people mainly in villages and they are supposed to give some amount of profit to govt.

Before leasing the land govt uses statistics to know the previous returns  on the land and can expect the profit range for current year, unless some disaster happens.

So in this he can`t report profits below the range set by govt ,if he reports he need to have strong reasons.

Else if we feel there can be problem in this approach lease it to some private organization and let them employ the people while adhering to labor laws and they will pay profits to govt.

They can`t cheat because as a organization they will sealed/penalized.....

Also now govt will spend more money on development projects like constructing dams, developing infrastructure in various cities(like fly overs to ease the traffic).

So this way we can create employment and eliminate poverty.

Also govt can now encourage "one or none" like  in China to control population and provide better employment opportunities and also can provide free education to increase literacy

So in this we can make India a developed nation.

P.S : Also in this process its is possible in some cases we are legalizing black money by imposing some penalty (say 60% even in some cases) and making it white money .This is a better solution compared to having the entire 100% as black money.

Coorg Trip

We have been to coorg recently.

We started 1:00 PM in the afternoon and reached coorg by 7:00PM .
We had pre-booked the room and room was in the middle of a tea  estate it was a little scary but was an awesome place.

Next day morning we started around 7 30 in morning and visited

Tala Kaveri was birth place of kaveri and it is very small pit sort of thing  from there it flows to  a lake and it flows down the hill where its joined by many tributaries.

From tala kaveri there is an awesome view of the valley and clouds (they say that from that location one can see the  view point is a border of 3 states)

And then Bagamandala its just a joining place of 3 tributaries of kaveri also includes the one from tala kaveri.

Then to Abbey falls just a water falls  and  to Nisargadama .

Nisargadama is park sort of place where there are lot of bamboo plantations ,elephant safari ,boating .

Also there is a deer park inside Nisargadama.

On the way back we visited a Budddhist city and golden temple.

Also coorg need to be visited twice once in summer where we can visit Tala kaveri and other hill stations and once in rainy season for water falls and stuff.
During rainy season the tala kaveri and Bagamandala will be flodded with kaveri water so need to visit twice.

Neverthless I`ve enumerated all the activities and places to be visited in Coorg they are as follows.



ACTIVITIES

The river Cauvery originates here at Talacauvery and is worshipped by the locals.

Trekking:Some of the known trails are in the hills of Brahmagiri, where you could trek your way to the Irrupa Falls. You could also consider trekking to Pushpagiri, the second higest peak of Kodagu and Tadiandamol (the highest peak).

Angling: Valanoor is the backwater of the river Cauvery. It draws fishing lovers from all over India. You can try and catch the famous mahaseer and the best season is from October to May.


White Water Rafting: There are few good camps around Coorg that offer rafting down the Cauvery river. For some fast paced action, visit the Upper Barapole River to the south of Coorg in Brahmagiri. The best time for rafting is from mid-June to mid-September.

 Coorgi silk saree are also very famous and they have a different style of wearing them.

PLACES

Madikeri Fort
This 19th century fort, in the centre of Madikeri, houses a temple, a chapel, prison and a small museum. The fort offers a beautiful view of Madikeri.

Raja's Seat
According to legend, the kings of Kodagu spent their evenings here. But what's unforgettable about Raja's seat is the spectacular sunset that one can enjoy from here.

The most visited tourist spot in Coorg is the Nagarahole National Park which is known for it's wild-life population. One can find elephants, tigers, leopards, sambars, spotted deers, and bisons in plenty.

Abbi-Falls a beautiful waterfall, Bhaga-mandala and finally Tala-Kaveri-the birth place of river Kaveri, is an astoundingly beautiful place which is surrounded by mountains.

Omkareshwara temple was built by Lingarajendra in 1820


Iruppu Falls
The river descends perpendicularly into a great cataract known as the Iruppu Falls. This place is believed to possess the power to cleanse one's sins and is visited by thousands of devotees from far and near on Shivaratri day.

Abbey Falls

Karnataka boasts of some scenic and exotic hill stations that are frequented by those seeking the green and serene. Among them one such location would be the Abbey falls.
As various streams congregate in the mountains above, they swell with the monsoon rains and force their way down the mountain slope. Splashing hard against the huge boulders of rock, unmindful of the crevices and hollows, the water drops at enormous speed accompanied by gushing sounds. This white wall of water creates a misty cloud with its moisture-like spray and descends into a flowing stream to perhaps join with the River Cauvery somewhere in the vicinity.

Valanoor
Valanoor, 30 kms.from Mercara,the back waters of river Cauvery is one of the most beautiful Angling sites in Karnataka.
Mornings would be the ideal time for fishing unless you are are a good fisherman or a lucky person.
Apart from fishing the view of the sunset is just awesome.

Nisargadhama

Cauvery Nisargadhama is situated about 36 kms from Madikeri. This is an ideal picnic spot. It is an island in the middle of the river connected by a rope bridge. You can do boating or go for elephant rides as well as visit the elephant training camp run by the Forest Department at Dubare (8 kms further).
This 2.5 sq. km. large island in the middle of the River Cauvery, is some place to romance.

Bhagamandala

When the river Cauvery flows downhill, it is joined by two more tributaries - Kanake and Sujyoti. The spot where all three converte (the Cauvery, the Kanika and the Sujyothi) is called Bhagamandala. The temple here, built in Kerala style, has smaller shrines dedicated to various gods. It is about 40 kms from Madikeri.

Harangi Dam is a great picnic spot 36 kms from Madikeri.


Dubare
This is mainly an elephant capturing and training camp of the Forest Department, at the edge of Dubare forest, on the bank of river Kaveri, on the Kushalnagar - Siddapur road

Kakkabe
Famous for being the largest producer of honey in south east Asia, though most come here for the Padi Igutappa temple


Somwarpet(Mallalli Falls)
If you can get off to an early start and if the sky is beautiful with the clouds, take the road to Somwarpet. This 42-kilometer, one-and-half hour drive will surely perk you up. This is the coffee heartland of Coorg. You will pass through some of the finest coffee estates you will ever see. Magnificent trees reaching up to the skies, casting much wanted masses of shade to the coffee plants. It's one great spread of continuous foliage very gloriously prepared in an extraordinary operation by Nature. Mingled with cardamom and pepper as well. Big, medium or small, they add to the already beautiful and fabulous landscape all around.


GoldenTemple- Buddhist Monastery
Feel Tibet in Coorg.....
After the Chinese took over Tibet, the refugees were settled at Bylakuppe Near Kushalnagar and the Buddhist Monastery was re-established here in 1972. It houses over 250 monks today

Chelvara Falls is near Cheyyandane which is around 16 kms from Virajpet and is one of the most beautiful water falls in Coorg. Chelavara Falls is also called as  Embepare  by the locals meaning  Tortoise Rock .

The Nalknad Palace of Coorg
The palace has stories and the walls and roof are decorated with beautiful ancient paintings and architecture. According to history after escaping from Tippu sultan' s troops Dodda Viraraja (Doddavirarajendra)

Chicklihole Dam in Coorg near Suntikoppa
Chiklihole reservoir in Coorg is located in between Madikeri and Kushalnagar and is roughly around 15 kms from Kushalnagar and Madikeri and the bonus is, it s near to Dubare.

Napandapole Falls
Napandapole Falls is located 12 kms away from Madapura (Madapur,Madhavapura) on the way to Surlabi.

Kotebetta
Kotebetta measures around 5400 ft and is the 3rd highest peak in Coorg after Tadiyandamol and Brahmagiri.
Kotebetta is an awesome place to trek.

Mudhumalai Bandipur Trip

We have been Mudhumalai  as a part of team outing  and around 20 people turned up .
We have been to Mudhumalai and Bandipur forests recently

Day-1

We started early morning around 7:30 in company vehicle and we reached the resort in Bokkapuram by afternoon or so.
It was a bit costly (company expense anyways).
The resort consisted of tree houses ,tree forts.

We went for safari in the Mudhumulai jungle after lunch.

The safari was provided the govt officials itself.

There we spotted few elephants,bisons wild pigs and few other wild animals.

At the same place there is a small museum with lots of pics etc..

After that during the night we had a camp fire and played mafia game with our team mates.

Also we played cards till late night.First time with team mates :)

Day-2

We went for trekking to a bird sanctuary early in the morning.

We started around 6:00 AM and we were accompanied by some local guards for the trek.

It was the most awesome trek I ever had.

The trek does not have a road/lane ,we cleared the bushes on the way and proceeded on the trek through the forest to top of a hill.

The way was horrible,it consisted of footprints of bear and elephant.

On the way there were some water bodies ,small canals it was extremely difficult to cross them as the water was very cold in the morning and banks were very slippery.

Each of the team mates carried a stick for clearing the way through.

Also in the middle of way we ended with up with many dead ends so we back tracked.

At many places we heard tiger growls also.

The uphill was horrible but the downhill was normal.

It looks like the downhill was the route generally used by people but for out excitement they took us in a totally different route(ofcourse the route doesnot exist in the uphill).

The total trek time was around 150 mins

After that we played TT and other games in resort and started back at around 2:30 PM and reached by 8:30 or so.

On a whole the trek was an awesome experience.