If the rupee has no value, does it matter if it is white or black?

A well-reasoned article on how to tackle black money in India has been written by an economist, Indira Rajaraman. Black money is supposed to mean earnings on which no tax has been paid but it has also come to include payments received for illegal activities, such as bribes extorted by the politicians and civil servants, or money made from drug and gold smuggling. A lot of black money is used in construction. "The problem is that we did not develop bond markets in the country as we should have, to the point where large construction projects could easily access formal financing," writes Rajaraman. So construction companies have to borrow unofficially at very high interest rates from people with ill-gotten cash. Labor at construction projects are typically migrants from other parts of the country and demand wages in cash. The trouble with digital payment is that it has to make profits to survive as a business, so someone has to pay for it, usually the seller. Small businesses, such as vegetable and milk sellers, survive on very low margins so they will be unwilling to bear the burden. "There are many millions who earn incomes well above the taxable threshold, who are below the tax radar and prefer to stay there," she writes. The reason is that the tax threshold is too low, at a total earning of Rs 250,000 per year, while tolerating constantly rising prices to keep interest rate artificially low. Artisans, such as electricians, plumbers and carpenters, earn well above tax threshold but they demand payment in cash. Filing tax returns and paying income tax would be of no advantage because they will not get bank loans to buy land. They find it convenient to borrow from the market at much higher interest, while saving on tax. The answer would be to increase the tax threshold to realistic levels which will immediately decriminalize hundreds of millions of honest, hard working citizens. Rajaraman recommends certain solutions to the problem of tax avoidance but none of that will happen because political parties function on donations of cash money where the donors are unidentified. According to the Reserve Bank, nearly 10% of the value of our exports never comes back to India, which means that about Rs 17 trillion has left the country in 44 years. The rich will always find ways to decrease their tax liabilities and there are many countries eager to help them to do so because the transfer of wealth helps them. Ireland has challenged the EU directive to recover 13 billion Euros in back taxes from Apple. The only solution would be to have the same tax rate throughout the world, but that is not going to happen. Meanwhile, Modi's cries of cleansing the system, as in China, is false because he has not changed laws to punish politicians implicated in the multitude of scams. Since the rupee has no value people are too poor to pay tax. Make us rich first.