A great example of incomplete journalism
Three weeks ago, the decision to scrap 500 and 1000-rupee notes was sold as a moral crusade, indeed, as a war on…indianexpress.com
Tony Joseph (@tjoseph0010) usually writes about varied stuff like Christianity and conversions, Anna Hazare, sex ratios and in the past has been an editor of Business World.
His latest piece on Modinomics is worthy of bestseller status (fiction category). Reminds me of Bollywood movies where the hero defies all logic to win his own narrative.
Here is Tony’s so called ‘logical’ dissection of the PM’s failure on the demonetisation front.
“For example, let us consider a small-sized operator with Rs 10 crore in black money, of which about Rs 1 crore is in the form of cash.”
Abridged version – According to Tony let as assume someone has 10 crore black money. Given norms by experts at best he would hold 1 crore in cash and rest in land, gold, apartments, benami accounts etc. Given the recent Govt proposal to impose 50% tax on such ‘black money in cash’ at best 50 lakhs will be collected by the government which is just 5% of the total black money. Tony then goes on to compare this to the honest tax payer who pays 30% tax and declares the government move as a complete failure.
Wow! Nice writing. But wait! I was wondering about what happened to the rest of the black money?
So here’s my query for Tony – Let us assume that the guy with the 10 crore black money invested the 9 crore equally in real estate and gold. So he buys one apartment worth Rs 4.5 crore (poor guy cannot afford a decent one in Mumbai so will have to buy one from a builder in the suburbs) and gold worth Rs 4.5 crore. How does he pay for it? Cash right? How do the builder and jeweller disclose that cash? Pay 50% tax right? So the tax receipts to the government works out to a total of 4.5 crore Plus 2.25 crore in a bond for 4 years.
Some of our esteemed journalists are busy ripping apart the demonetization exercise as if the scheme was designed and executed by a bunch of stupid buffons in the government. They cast doubts on the intellect, integrity and capabilities of some of the India’s seniormost beureaucrats and RBI officials. I feel sad that due process is being ignored here as in their eagerness to garner eyeballs they are disclosing only one part of the narrative.
Tony talked about the 1 crore in cash but never disclosed how the rest of the 9 crores was impacted. Why? The guy in the narrative may not pay tax on the entire 10 crores but together with his accomplices (the builder and the jeweller) they will pay the govt 50% in taxes + sleepless nights + future scrutiny etc. Or am I missing a trick somewhere?