War on dirty money

Common citizens too have a responsibility to fight out this menace
"Remarkably, CVC observes Vigilance Awareness Week every year to bring together all stakeholders in spreading the message of integrity in all spheres of life."
"Remarkably, CVC observes Vigilance Awareness Week every year to bring together all stakeholders in spreading the message of integrity in all spheres of life." cvc.gov.in

Let me begin today’s column with a quote from the  Prime Minister’s speech which he delivered a few days back while marking the Vigilance Awareness Week and launching the new Complaint Management System portal of Central Vigilance Commission (CVC).

The Prime Minister said, “No matter how powerful the corrupt may be, they should not be saved under any circumstances. No corrupt person should get political-social support, every corrupt person should be put in the dock by the society, it is also necessary to create this environment.”

Touching upon a worrying trend, the Prime Minister said, “We have seen that many times the corrupt people are glorified in spite of being jailed even after being proven to be corrupt. This situation is not good for Indian society. ” He stressed the need to bring in common citizens in the work of keeping a vigil over corruption.

Remarkably, CVC observes Vigilance Awareness Week every year to bring together all stakeholders in spreading the message of integrity in all spheres of life. This year, it is being observed from 31st October to 6th November with the theme of “Corruption-free India for a developed nation”.

We witnessed a lot of buzz  during the week as various institutions and departments conducted effective awareness programmes across Jammu and Kashmir making people aware about the menace of corruption. Actually, for the past few years, one of the most buzzwords all over the country is corruption. From primary school to higher echelons of power, discussing the termite of corruption dominates every day.

When corruption is discussed, it is the money which comes into focus for changing hands clandestinely. In other words, corruption has made Dirty Money a reality. All of us know the primary function of money is to serve as a medium of exchange. As such it is accepted in the form of currency and coins in final discharge of debts or payment of goods or services. Even as the money in itself is not an evil, it’s the wrong use which has made the money dirty.

Money is considered as the root of all problems. It’s the money which is responsible for many mischiefs and evils. Corruption, black marketing, smuggling, drug trafficking, tax evasion or name any form of evil existing in our society, the root cause is the misuse of money. The money-crazy people want more money to cater to their needs and during the course they don’t hesitate to have money from any source and it’s here the money laundering is prosperously triggered.

Meanwhile, when the country has geared up to declare a war on corruption, let’s have a look at the corrupt practices which over a period have become a norm. 

We all know that corruption is a game of two players: one who gives, and one who takes it. Wittingly or unwittingly, we have integrated this menace in every aspect of our life, making it extremely difficult for us to stay in business without resorting to unethical or illegal practices. In short, corruption is blatant and exists in different forms. There is also a situation where a person is selling his influence over the decision process involving a third party- be it a person or an institution. So this influence peddling is also a type of corruption.Then there is the practice of graft in which the official gains something of value, not part of his official pay, when doing his work.

Corruption is through patronage mode also. This may be legitimate, but most of the time it can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able and deserving ones. We cannot overlook nepotism and cronyism as safe ways of corruption.

Favouring relatives or personal friends of an official is by all means a form of illegitimate private gain. Seeking to harm enemies becomes corruption when official powers are illegitimately used as means to this end. And, of course, embezzlement and kickbacks are some more means of corruption.

Let me give you some simple examples of generating dirty money. We have a common practice of hiding the cost of any property. A person purchases a property or residential house. But only a part of the actual price is recorded in the documents registered with the authorities. The stamp duty is paid only for the recorded amount, and not for the entire transaction amount.

A company shows a reduced income in its accounts by showing some un-incurred expenses and hence pays less tax. Here it is the undeclared amount of property transaction and the amount held by fictitious expenses and the evasion of tax amount which is dirty money and interestingly generated through normal legal transactions. Huge black money is generated by illegal, immoral, and anti-social transactions like drug trafficking, unauthorised parallel foreign exchange transactions etc.

If estimates are to be believed, the illegal money of those involved in practices of corruption parked in foreign countries is over 20% of our economy. It’s this illegal money which has furthered our economic misfortunes. Today our mainstream economy is designed in a way where richer are going richer and poor are going poor every day. And this is really threatening, as the illegal money existing in our economic system is by all means a parallel economy.

Parallel economy is basically functioning of an unsanctioned sector in the economy whose objectives run parallel, rather in contradiction with the aroused social objectives. In other words, a parallel economy is nothing but a bottomless economy or we can simply call it a hidden economy.

The impact of this dirty money has a direct bearing on our economy in several ways. In the first instance it leads to the misdirection of our precious resources. The income distribution gets worsened. It is interesting to note that there are income tax advisers, chartered accountants and other financial advisers who are part of the establishment of dirty money operators.

One of the big disadvantages is that the dirty money has viciously corrupted every system. Succinctly, the politics of dirty money has decomposed our moral fibre. The existence of this huge hidden segment of the economy has handicapped our planners in making a correct analysis and formulation of right developmental policies for various sectors of the economy. So, if the dirty picture of the money is not cleaned, it’s sure to lead us to ruin.

Precisely, corruption is such a vast area and hugely networked that it can be described as a sector, which is deeply integrated into every economic sector. We can only just think of reducing it and not weeding it out. 

Meanwhile, the government alone cannot fight a war against corruption. Common citizens too have a responsibility to fight out this menace. The prime minister rightly  stressed the need to bring in common citizens in the work of keeping a vigil over corruption.

(The views are of the author & not the institution he works for)

DISCLAIMER: The views and opinions expressed in this article are the personal opinions of the author.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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