Parl panel on Finance discusses ramifications of election bonds

New Delhi: The Parliamentary panel on finance had recently deliberated upon the consequences of election bonds for funding political parties. But no final conclusion was reached due to the paucity of time.

The chairman of the Standing committee, Veerappa Moily, submitted a report to the Speaker on 28th March on the "Status of unaccounted income/wealth both inside and outside the country."

The report contains details of the discussion held in the committee meeting.

In one of the meetings held in the month of March, the members discussed the issues - whether initiatives like the electoral bonds scheme would lead to an increase in the inflow of black money into political funding; the credibility of tax audit reports filed by Chartered Accountants (CA) and action taken against them, efficacy of limits imposed on cash transactions and the extent of trade-based money laundering (TBML). The committee also said that they have no objections to publish details of the study report as had been done by the three major institutions related to unearthing black money.

The committee also discussed demonetisation of currency notes of Rs 500 and Rs 1,000 and the ramification after that.

The Chairman of the committee has put on record that a draft report on demonetisation was prepared but due to lack of consensus it could not be finalised.

On the directions of the Supreme Court, the Central Government in May 2014 had constituted the Special Investigation Team (SIT) on black money under the chairmanship and vice-chairmanship of two former Judges of Supreme Court. The SIT has so far submitted seven reports to the supreme court.

The Standing committee in their recommendation mentioned that they would expect the Ministry of Finance (Department of Revenue) to continue their efforts with greater vigour to unearth and bring to book unaccounted income/wealth both within and outside the country including follow-up action on the seven reports of the Special Investigation Team (SIT) constituted on Black Money as well as the three study reports on estimation of unaccounted money.

The Committee would thus expect more fruitful outcomes on this count, both in terms of the much wider tax base as well as actual tax yield. In this context, the Committee also desires that the long-delayed Direct Taxes code should also be finalised at the earliest and reintroduced in the Parliament with a view to simplifying and rationalising the direct tax. The Committee would formulate their detailed recommendations on this subject after the conclusion of the examination/evidence on the subject. In the interim, the Ministry of Finance (Department of Revenue) should furnish Action Taken Replies to the Committee within three months.

In 2010, Union finance ministry ordered to inquire the amount of black money by three financial institutions, namely National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM), separate MoUs were signed with these three Institutes on 21st March, 2011 and the study was assigned to them with the Terms of Reference .