New Delhi: The Union government on Monday announced that the total worth of declaration of assets made under the black money compliance window is ₹4,417 crore by 638 declarants.
An official statement said that the assets worth ₹3,770 crore ($580 million) declared under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, were subject to a final reconciliation.
Revenue Secretary Hasmukh Adhia told reporters here that the final quantum of declarations showed some change, though the number of declarants remained the same.
“Some envelopes (declarations), that came from various places, reached us after the last date and the total amount shows some difference at ₹4,147 crore, although the number of declarants remains the same,” Adhia said at a press conference along with other secretaries of the finance ministry and chief economic advisor Arvind Subramanian.
The law provides for a compliance window for declaring and paying penalty. Failure to meet the compliance timeline will attract an additional penalty of 90 percent for a total tax liability of 120 percent on the quantum of black money stashed abroad.
September 30 was the last date under the amnesty scheme, that called for a tax of 30 percent and an equal amount in penalty, that is to be paid before December 31.
The black money act, for the first time, allows levy of tax in India on assets kept abroad.
The Income Tax department has filed 132 prosecutions against 42 cases whose names have appeared in the HSBC Geneva bank list, Adhia said.
This move followed the Supreme Court last year, giving a list of 628 entities in the HSBC Geneva branch, furnished to it in a sealed envelope by the government, to the Special Investigation Team (SIT) constituted in May last year.
The revenue secretary said the tax department is now more actively pursuing penalties and prosecutions with better access to information allowed by treaties like FATCA with the US and the taxation agreements India has with 96 countries.
“Our request for (tax) information from other countries has doubled over the last fiscal. 1,600 requests went out in 2014-15, as compared to 800 the year before,” Adhia said.
At the G20 nations Brisbane summit last November, the leaders endorsed a new global transparency standard by which more than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017-18.
“A common reporting standard multilateral agreement is being discussed. Some countries, including India, have already agreed on its early adoption from 2017,” Adhia said.
India has no official estimate about the quantum of black money stashed away by Indians abroad, but unofficial estimate puts it somewhere between $466 billion and $1.4 trillion.
India has done well to stay ahead of the curve in the technological revolution
The sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991
India has managed to provide the cheapest telephony services around the world
For the most part of human history, the change was glacial in pace. It was quite safe to assume that the world at the time of your death would look pretty much similar to the one at the time of your birth. That is no longer the case, and the pace of change seems to be growing exponentially. Futurist Ray Kurzweil put it succinctly when he wrote in 2001: “We won’t experience 100 years of progress in the 21st century – it will be more like 20,000 years of progress (at today’s rate).” Since the time of his writing, a lot has changed, especially with the advent of the internet.
India has done well to stay ahead of the curve in the technological revolution. The country’s hyper-competitive telecom sector has led the revolution from the front. In fact, according to Reserve Bank of India data, the sectoral change in productivity has been the highest in the telecommunications sector since the reforms of 1991, growing by over 10 percent. On the other hand, no other sector has had a productivity growth of above five percent during the same period. It is no wonder that it has also been one of the fastest-growing sectors of the Indian economy, growing at over seven percent in the last decade itself.
Such an unprecedented pace of growth has been brought about the precise levels of change that Kurzweil was so enthusiastic about. Today’s smartphones have the power of computers that took an entire room in the 1990s, and the telecom sector has had to keep up with a provision of commensurate internet speeds and services. Meanwhile, India has managed to provide the cheapest telephony services around the world, which has hit rock bottom after the entry of Reliance Jio. This has ensured access to those even at the bottom of the pyramid.
Even though consumers have come to be accustomed to fast-paced changes within the telecom sector, the entry of Jio altered the face of the industry like never before by changing the very basis of competition. Data became the focal point of competition for an industry that derived over 75 percent of its revenue from voice. It was quite obvious that there would be immediate economic effects due to it. Now that we’re nearing a year of Jio’s paid operations, during which time it has even become profitable, we saw it fit to quantify its socio-economic impact on the country. Three broad takeaways need to be highlighted.
First, the most evident effect has been the rise in affordability of calling and data services. Voice services have become practically costless while data prices have dropped from an average of Rs 152 per GB to lower than Rs 10 per GB. Such a drastic reduction in data prices has not only brought the internet within the reach of a larger proportion of the Indian population but has also allowed newer segments of society to use and experience it for the first time. Since the monthly saving of an average internet user came out to be Rs 142 per month (taking a conservative estimate that the consumer is still using 1 GB of data each month) and there are about 350 million mobile internet users in the country (Telecom Regulatory Authority of India data), the yearly financial savings for the entire country comes out to be Rs 60,000 crore.
To put things in perspective, this amount is more than four times the entire GDP of Bhutan. Therefore, mere savings by the consumer on data has been at astonishing proportions.
Now, this data has been used for services that have brought to life a thriving app economy within the country. So, the second level of impact has been in the redressal of a variety of consumer needs — ranging from education, health and entertainment to banking. For instance, students in remote areas can now access online courseware and small businesses can access newer markets. Information asymmetry has been considerably reduced.
Third, a rise in internet penetration has distinct positive effects on economic growth of a country. These effects arise not merely from the creation of an internet economy, but also due to the synergy effects it generates. Information becomes more accessible and communication a lot easier. Businesses find it easier to operate and access consumers. Labour working in cities has to make less frequent trips home and becomes more productive as a result. Education and health services become available in inaccessible locations. Multiple avenues open up for knowledge and skill enhancement.
An econometric analysis for the Indian economy showed that the 15 percent increase in internet penetration due to Jio and the spill-over effects it creates will raise the per capita levels of the country’s GDP by 5.85 percent, provided all else remains constant.
Thus, India’s telecom sector will continue to drive the economy forward, at least in the short run, and hopefully catapult India into 20,000 years of progress within this century, as Kurzweil postulated. The best approach for the state would be to ensure the environment of unfettered competition within the industry. Maybe other sectors of the economy ought to take a leaf out of the telecom growth story. The Indian banking sector comes to mind. However, that is a topic for another day. (IANS)
(Amit Kapoor is Chair, Institute for Competitiveness, India. He can be contacted at Amit. Kapoor@competitiveness.in and tweets @kautiliya. Chirag Yadav, a senior researcher at the institute, has contributed to the article.)