Dear Sir / Madam,
I am pleased to you our thoughts on how a Voluntary Disclosure of Income Scheme (VDS) may help India. (A detailed note can be obtained on request)
The incumbent Finance Minister had launched the last Voluntary Disclosure of Income Scheme (VDIS) or VDS as it is more popularly referred to, in 1997 under an earlier government. We all know that in spite of the best intentions of all concerned, a parallel economy - the “cash” economy leading to black money - continues to flourish in India.
The last VDS was quite successful, judging by the fact that it managed to unearth black money aggregating to Rs33,000Cr. Disclosures under the Scheme was around Rs33,000Cr and tax collected Rs10,050Cr.
Experts estimate the size of India’s black economy to be as much as $500bn (Rs24,25,000Cr)
We believe another VDS at this stage may help the Government achieve various objectives. It would not only reduce unaccounted money in the system (ensuring which is the responsibility of every government), but would also bring the much needed liquidity into the system, which can be utilised to invest in infrastructure development, or even for capitalising domestic banks.
Another area where VDS could help is in repatriating wealth siphoned off to, or stashed away in overseas banks and tax havens.
In the backdrop of the ongoing financial crisis and worries over solvency of some banks in India, we examined whether the Government would consider introducing another VDS.
BigGains !!
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