India's parallel economy is at 40% of its GDP

Take that!! all you economists and analysts, who keep debating over endless hours on prime time television as to what the finance minister might deliver this friday. "Black money" the other proxy term for "parallel economy" is at its rampant best over the last few years. We have allowed the menace to multiply to such levels that today it forms more than 40% of our GDP and the FM still keeps talking about teething woes on the fiscal deficit front and the need to widen the tax net further to maintain bouyancy in the government coffers. Money can be differentiated as either 'black' or 'white' based on whether the incidence of taxation falls on it. Money is said to have been acquired through legal channels or is termed 'white' once its within the ambit of taxation. Having said that black money isnt illegal per se. A sizeable section of the population acquires money through hard work, moral and legitimate means and consequently conceals a portion of the same. Even if we take the case of agriculture, it will do good to term the entire money sloshing around there as 'black' as the sector as such falls outside the tax net. We have cases of the wealthiest of farmers in India forming a core group of the proud 10 million HNI's (High Net Worth Individuals) in our country. But what the FM should worry about is money acquired and concealed through illegitimate means and those currencies that flush around the suitcases, bedrooms and bathrooms of the elite including that of his own political kinsmen, who in my opinion are the biggest repository of black money and who refuse to be reined in by any judicial or regulatory force or authority. These political babus are the most intransigent group in our country who sniff out all loopholes available to evade the tax net, take advantage of the porous capital controls in the financial system, engage in perennial round tripping of money and explore other alternative routes to ensure that their capital appreciation and incomes go tax free. Ours is a country where the Income tax department serves a notice every day to the honest tax payer asking him to pay more, uses its workforce to locate mistakes in salary returns on paltry or meagre surcharge computations and acts so diligently in recovering money from the middle class Indian. Successive FM's have been rest assured that direct tax revenues will remain bouyant on account of the tax recoveries from the rising middle class (the eternal suspect of the Ayakar Bhavan). Every loophole in taxation ambiguties affecting the common man gets plugged through TDS, VAT or an FBT. What about the FM's own fraternity? We still have a Laloo Prasad Yadav leading a king-size life wit his comrades, cattles and their fodder; We still have a Mayawati declaring her unaccounted wealth as gifts from her BSP cadres and getting them exempted from the tax authorities themselves through their imprimatur orders; We still have an Amma (As im from chennai i will call her 'Amma') who has been exonerated from all the disproportionate wealth that she has amassed over two decades; We still have a Rahul Gandhi who derives illegal income through drug lords from Latin American countries; but its always film stars and real estate magnates who make news when it comes to tax authorities. They are an easy target to make up for the deficits of the IT department but where are these double standards taking us going forward. Equality before law is a constitutional neccesity but that seems to be a term unheard of in our economy.All the debates on our economy and the budget talks or even listening to the budget seems futile and worthless when the proponents of the parallel economy are sitting right under the nose of our finance minister.

The 'Budget Mania' seems to have caught on to most of my friends. An almost non event has become a festival of sorts due to the media hype and hoopla among the avergae masses. As many have been asking me about my "wishlist " to Mr. Chidambaram...here it goes...
Dear Mr. PC
Iam not gonna request you to keep your word on maintaining the growth momentum of this economy or give the much needed thrust on reforms front or focus on social infrastructure, agriculture etc etc...There must have been a half a billion who must have already told u all this with enough economic jargons interspersed between the lines. I have a unique request. Its a far more economical and largely profitable way to wipe out the entire fiscal deficit of our nation in one stroke. Unearthing of black money should start at the top of the pecking order and those sitting at the fountain head are your own colleagues in the parliament (572 of them if my numbers are right). Iam given to understand that the budget session, i mean the time when u would be presenting your final budget prior to the election year to the nation, has historically witnessed full attendance by both houses of the parliament. Therefore if an Income Tax raid can be arranged at all the houses of these 572 elite chosen ones of your wonderful 'Ivy league'(which may include ur residence at Haddows Road too), that would prove to be a wonderful icing on the cake in your chequered political and business career. U can leave your esteemed chair after presenting the budget filled with a pompous gait and a satisfaction at having done the biggest political class act that would benefit the common man and the country at large. You would kill two birds with one stone by adding a humongous amount to the government's currency chest as well as wiping out the fiscal deficit in toto, a major negative that has harmed our economic image globally over the years. So honourable finance minister, kindly ponder over this citizen's wish list, maybe over a cup of "black coffee" if i may suggest so. May god give you the political will to carry out this "dream reform". You have one chance to create history now!!!