Black money is here.

The government has tabled a Money Laundering Bill in parliament which seeks to attach property of criminals during the trial itself. The bill seeks to make Indian law compatible with laws of other countries. Very commendable except that most of the black money in India is generated by bribes taken by criminal politicians and thieving civil servants and from land grabbing where public land is sold off to friends or relatives of politicians and civil servants at throw away rates to be sold later at exorbitant prices to developers. Thus, most of money laundering is in property and the new bill is merely cosmetic cover up. Efforts have been made to rid the country of the pestilence of black money but not never with any serious intent. In the past a law allowed the government to buy any property at the declared rate and sell it at an auction to discover its true price. So if a person declared the sale value of a property at Rs X the government would pay that amount to the owner, take ownership of the property and auction it off. This only increased the rates of bribes taken by politicians and tax fellows and only people stupid enough not to pay a bribe lost their properties. Now a new wheeze called " circle rate " has been introduced in states such as Delhi. In this scheme Delhi is divided into circles of affluence, or lack thereof, and a rate is set by the government. This sets the floor rate for every property in a particular area and you have to pay stamp duty and registration tax on the rate set by the government even if you sell the property at a lower value. However the government can never set the rate so high that it approximates the true value of properties because no one will pay such high taxes and the property market will seize up altogether. Not good for the criminals. Thus our most revered Prime Minister declares an apartment in Vasant Kunj in Delhi at Rs 8.6 million while its market value is over Rs 20 million. By definition black money cannot be controlled by the RBI or the government and is the main reason why inflation cannot be controlled. To be serious about money laundering stamp duty should be lowered to 1% as in other countries. Anything else is just smoke.