“When God closes all the doors…
He leaves a window open”.
All the Opposition political parties and politicians who were protesting demonetisation for over a month must feel like fools now. If anyone has the slightest feeling they were protesting over long queues or anyone suffering – then they should get rid of that notion. An entire session of parliament was wasted because of these protests. Those parties who were protesting because they thought their excess black money will go up in flames can now relax. They have been bailed out through magnificent black-holes in the demonetisation policy. Here is the essence of this:
Political parties can deposit ANY AMOUNT of cash they claim to be holding and collected prior to November 8, 2016. The “suspect” barrier of 2.5 lakhs DOES NOT apply to them as it does to other citizens and entities.
Now, that isn’t just a loop-hole. It is a massive BLACK HOLE in the demonetisation system. For those who thought some new laws were made or policy statements issued on December 16, they are wrong. Nothing new was done on December 16. The facts with respect to political party finances remain unchanged. These rules and laws are:
# Political parties are exempt from income tax.
# Political parties can collect cash donations up to 20000 without having to disclose names of donors through “coupons” or simple cash receipts.
# Political parties are liable file IT returns and returns with EC. They are also liable to be scrutinised by both these authorities in case of fraudulent donations.
Some people grandly claim on Social Media that Modi-supporters are wrongly interpreting some statements by Finance Babus as being “new laws” or “new rules”. To repeat NOTHING NEW was announced on December 16. The only hole in demonetisation that got exposed on December 16 was this:
Yes indeed. The black-hole is that political parties were assured by ModiSarkar and their Babus that their black money is safe. They can deposit any amount with them in old notes till December 30 and there is nothing to worry. So where do these political black money hoarders benefit? Here is how:
# For ordinary folks, any deposit of old notes over 2.5 lakhs that does not match with regular IT returns and pattern of income will be scrutinised and penalties levied if found to be black money.
# This condition DOES NOT apply to political parties. That being so, the scrutiny of political party deposits will be merely at the whims of GOI and the IT guys.
Now, you and I know there has hardly been a case where a political party has been raided or penalised by IT department for hoarding black money. This report by Timesnow on December 16 quoting an ADR report on Congress cash donations should tell you a story:
That pattern could be true to a large extent for most political parties even during the period 2013 to November 8, 2016. After all, political parties are the biggest beneficiaries and also the root-cause for black money and corruption in the country. This tweet by Reuters is just one piece of information that was reported meaninglessly without any chain attached to it:
Now, where is the need to even clarify that by the media or any dumb Babu? Since the notes were illegal post November 8 is it not obvious that collections only up to November 8 can be deposited or that no old notes should be accepted after November 8? But is that actual practice? NO! It is not. That’s how clever politicians are. Now, this deadline can work only and only if one question can be answered:
Have all political parties declared their stocks of cash as at midnight November 8? Was it mandatory for parties to declare their cash holdings to IT or EC by November 9 evening? NO!
That is the second escape route. First was no 2.5 lakh limit (as with ordinary people and entities) for scrutiny and second, no declaration of cash holdings as at November 8 by these parties was sought. Fantastic!
So, legally the IT will scrutinise a political party deposits on WHAT BASIS? NOTHING! Supposing a political party which had a deposit pattern of only cash collections of 10 crores per month suddenly deposits 300 crores on or before December 30, what will the IT or EC do? NOTHING! What CAN they do? NOTHING! What will GOI do? NOTHING.
Even if the November 8 deadline were to be religiously followed, remember that political parties can collect cash up to 20000 from unknown, unnamed individuals through a coupon or receipt LIMITLESSLY. In other words, I can show a collection of 200 crores from October to November 8 (or even July to November 8, if you like) through coupons and back-dated receipts showing 20K received from thousands of unknown individuals in OLD notes. And then I deposit these notes into the bank by December 30. Who will question me and why? In fact, as a political party, I can go one better. I can even LAUNDER black money for others. This is an instant rough example I gave but you and I can refine it even more but it’s not necessary. You can refine this to be flawless and so can I:
Political parties have experts in “Cooking” books. Oftentimes, even their friendly IT official will teach them (or anyone) how to treat transactions in books. Politicians and political parties are the LEAST SCRUTINISED by IT because they are exempt from tax and any govt of the day protects other political parties and politicians. There are rare cases of disproportionate assets of “individual” politicians (Mulayam, Mayawati, Late Jayalalithaa etc) but those were more politically-driven than by IT or law-driven. Thus, our courts have exonerated each of these politicians named.
So why were the political parties up in arms and ranting so much against demonetisation. Were these people seriously bothered about ordinary folks in queues or ATMs or any deaths or farmers? NO! Not at all! Because they were fooled into believing this:
That they will also be subject to the same 2.5 lakh “scrutiny” barrier as any other individual or entity. That they will also face hefty penalties like other folks. This fear led them to believe their piles of black money will simply go up in flames.
That’s the only reason they agitated. Else demonetisation doesn’t bother them in the least. Hardships of common folks don’t bother them in the least. Farmer deaths? Congi Karnataka has seen 450 plus farmer deaths since April to October deaths this year? Does Pappu give a damn? No he does not. Even the corrupt NDTV breathes a sigh of relief for political parties based on FiniMin’s assurance that deposits by political parties WILL NOT be scrutinised. They will only be gently quizzed.
Demonetisation has had some positive effects. It has blunted terror-funding a bit. It has blunted the counterfeit note business. It has exposed corruption in banks, public systems and even in the RBI. So the GOI knows corrective actions required if it is willing to take them. But demonetisation WILL NOT affect the most corrupt in this country – Politicians and Political parties. And therein lies the rub!
So, what now PM Modi?
1. Since you so strongly endorse a Cashless and Digital economy, is it not time you outlawed cash donations to Political parties? Let there be only cheque or digital donations to the parties.
2. Pass a law that undeclared money and black money with political parties will attract same penalties as any other individual or entity.
3. Pass a law that late returns and fraudulent IT returns will attract the same penalties and punishments as any other entity.
4. Bring political parties under RTI. Don’t save your party or any party. Show the people you mean business and want to see the end of corruption in politics.
5. People trusted you with the demonetisation wholeheartedly. They proved their willingness to fight corruption in politics. It is time you kept your end of the bargain.