Demonetisation – is it a scam with the common man?

Introduction

It is a fact across the world that 5% of population hold 95% wealth. The Swiss authorities released a list of 700 and odd people who parked their monies abroad in tax havens and the same received by the Government of India is considered to be a tip of the iceberg. The list alleged the name of Ambani’s, Bachans, Gandhi’s etc...

How did the Government act with this list? The common man felt that all political parties were very lenient and were reluctant to act. It is the Supreme Courts intervention forced the government to act. Somehow the action taken in these cases were wrapped under the shroud of secrecy like famous Hasan Ali case. In the case of Hasan Ali, the horse race gambler from Poona, the Income-tax Department in 2007 detected several lakhs of Crores black money parked in Swiss Bank account. No swift action was taken and till date, all the government collectively has failed to recover even a penny from this account.

The above picture clearly tells the story that the bigger malaise to our country is caused by a minority group of 5% who indulged in criminal act of siphoning the monies in by collusion with national and international banks who were both the conduit and carrier of sleaze monies outside India. Every Government including Modi Government has failed to get back the monies as promised and also act firmly with this minority group who caused grave injury to our country.

Government effort to demonetize is an effort to recover 5% of black money stored with 95% of population is being questioned as it is affecting the common man. When Government has miserably failed to act against the minority who are rich and powerful, then it is incumbent on the government to provide the same level playing field to 95% of population who holds 5% of wealth. The success of any drive is usually based on Pareto's Law of 80:20, where 80% of malaise can be treated by tackling with 20%.

Since independence, our countrymen are having the habit of dealing with cash irrespective of social strata one belongs to. Secretly saving the monies is the usual habit of any women for their grey days. Many poor and ignorant people do not have faith in banks but end up storing their earning in cash. The incidence of the saving habit can on. Apart from this, the society consists of people having black money. So in all the wisdom Government should have made a sensible move by demonetising followed by a voluntary disclosure scheme and not otherwise as it is an accepted fact the parting with money is very painful for any person. 

How the Government will justify that the minority crooks who parked the monies outside have got away and the common man comprising individuals across the section of society, who believed in keeping the cash inside the country, are having fish bone in their throat. This is where Government went wrong as VDIS should have been declared after demonetisation as it somehow would have given the majority holding 5% of wealth a feeling to let the cash go not out of hopelessness but with some degree of dignity and enthusiasm.

Certain section of political class believe that the BJP party leaders had advance information about demonetisation, which enabled them to convert their cash much prior to Modiji’s declaration. If government needs to come out clean then it has to bring a JPC to probe all huge deposits of cash through RBI with every bank. This gesture of BJP will reaffirm the common man and also vindicate that BJP is not party to any foul play but is genuinely concerned for eradicating black money from society.

The Government can easily go after the minority section that hold 95% of wealth in two pronged strategy. First, by going after all the national and international banks who have laundered the sleaze money out of India, just the way United States of America government did. We do not need the list of black money from outside, because money has gone out of India only through banking channels. Therefore, just allow the Income-tax Department a free hand to probe all banks especially foreign banks on money laundering. The US Government did the same and imposed heavy fines on HSBC and other banks involved in this murky affair. 

Secondly similar to demonetisation of currency drive the government should start again a demonetising drive in real estate sector so that entire sleaze comes out once for all.

Banks stinks

Banks are the real conduit and genesis to the problem of black money because without them the mess would never would have happened. Cooperative banks also have their fair share in this muck. In siphoning of the monies the banks made the funds available to the same minority group of 5% population who holds large corporate houses. The 95% of industry comprising SME’s (small and medium enterprise) never had access to funds. This created double jeopardy as the rich used the funds in cornering important assets (like mining, telecom licences, oil and gas wells etc.,) of our country with absolute control. On the other hand the same group failed to perform on these assets which prevented India to a rapid path of industrialisation. Fight of Ambani’s with CAG for KG Basin, Coal mining Scam, telecom scam is all part of the Bank Malaise as the crony capitalist used bank monies to corner the licences in front companies and used the same licenses with exorbitant valuation to raise the money from investors and public.

Banks lending to rich has created maximum NPA’s. All along Banks failed to recover these amounts as they were not only lenient but were part of window dressing to keep their skeletons in their cupboards. By not writing off the NPA’s at the right time in their books led to artificially jacking the price of real estate. On one hand it comforted the banks in showing higher value of NPA in the books and on the other it allowed the real estate mafia’s to artificially hold higher prices of this NPA. The common man knew that the bank is playing foul and protecting its own skin and shielding rich businessman, politician and the underworld who had parked lot of money out there.

Now the banks are out cash. If the NPA’s are actually written off then many banks will become broke and insolvent. It is also alleged on the Government that banks are getting pooled and merged as the government knows the extent of malaise inside the banks. It is also known to the Government that by working backward anyone identify the origin of the problem. So it is alleged that by merging the banks, demonetisation, cap on withdrawal moves are cover up operations which is Government’s hidden agenda.

The demonetization move of the Government and the cap on withdrawals has increased the money supply in bank. The banks without any effort on their NPA collection are sitting on funds for disbursal. The scam in the offing is that the money supply is literally being looted from common mass by preventing them to withdraw their own money. This again puts a speculation on Governments move that the banks are gearing up to finance the rich having large industrial house, who are the real progeny to creation of black money.

The challenge to Modi Government this time is to show by action that disburse of funds will only fuel SME’s sector which holds the key for rapid industrialisation and creating employment. The common man also expects that the government with this windfall gain must bring down the taxes, bank rates and create infrastructure to pave the way for next generation reform.

India a cashless society now a myth

The existence of cash is inversely related to the development of any society. India is a country where more than 70% population still lives rural areas. Therefore, the common man buys food, clothing, medicine and other needs by using cash as their average earning is still in few thousands of rupees. Every economic activity around the common man is interactions that are at the lowest at the level of development which is connected with cash-centric society.

It is necessary for a country to develop not only banks for a cashless society but have sound infrastructure for power, roads and other amenities. It is possible to integrate every economic infrastructure once the development is complete. Emergence of a cashless society cannot be immediately mapped with Digital India campaign because it is not the presence of the platform but the absence of culture for shifting to plastic money shall be a challenge. The resistance by a common man for this cultural shift may take a decade time just the way the common man experienced the mobile technology and the cable TV.

I am positive about the demonetisation as the misery is only for a short while and great days are ahead all of us. But this period is a tough time for a common man and during these hard times if government at the earliest match and sync with the required money supply without any hindrances then common man can easily be won over. The Government should immediately remove all caps on withdrawal so that economic activity which has come to standstill can restore peacefully. This move will also re-establish faith of a common man with the Government.

I am of the view that in all likely fairness the government should give the same treatment to 95% of population while handling the black money inside the country with the similar approach matching the action taken by Government with the minority group who were having the black money outside the country.

Will the government strike this balance is still a likely question?

Hari Rao

25.11.2016

0838hrs

My Story - My Truth

Nobody can hide their true reality in extreme pain and pleasure.

After coming out from NADT and joining Bangalore, I had attended  more than 40-50 Search action in the year 2001-02 despite having a substantive assessment charge, Why? Had amazing senior officers like Suresh Battini, Danda Srinivas, TVB Reddy, Ravi Ramachandran, Amol Kamat , Parshiviah, Srinivas Bidari and Sasmal mentoring me by holding my hand. For the next couple of years, the Senior officers and stalwarts like K V Chaudhary Sir, Ronmoy Sir and & Jason Sir enthused me to participate in searches more than 100-150 despite having regular assessment charge. Madam G H Kriplani had always motherly affection with the entire team and N P Singh sir, like a scolding big brother, though he may not sound appreciating through words, but was a noble soul who supported every member in the investigation team like a backbone. Having Mentor Officers like Gopala Rao Sir, GR Reddy Sir, Ravindra Sai Sir KK Mishra Sir, Swain Sir, Chinna Sir Lucas Peter Sir was indeed an icing in the cake. Having Kalpana Kataria, Botta Srinivas, Amrita Ranjan, Sapna Khanna, Anusaha Khurana, Swapna Ambatt, Satyamoorty & Ramanababu as colleague was peak in the relationship of camaraderie. This was the Platinum/Golden period in my life and I am sure that no one will ever see this environment again as every senior and junior rose above their personal comfort.

But as said good things comes to an end and it really happened to me around 2005 as all great seniors slowly got promoted and were leaving Investigation wing. Anurag Sahay got newly promoted as JCIT, and soon he was shunted out from assessment charge due to harassment complaint having Vigilance issue. After removal for the active field posting, soon he managed to clear his name from Vigilance issue and managed to get into the Headquarters. It was the darkest period in Karanataka Income-tax as UP-BIHARI lobby took over. Later Anurag Sahay went on deputation to HAL as CVO.  I am certain he joined there to overcome the guilt form future problems and also learn the ropes to protect the UP BIHAR lobby.

Stakes by this time were all time high as REAL ESTATE boom was also peaking. I was transferred to investigation but I ensured that I will not work under Addl DIT-1 because he was a person with absolute sweet talk as honey but was completely opposite from inside. I saw and experienced that he had not only attempted to destroy the career of a junior IRS investigating officer, but planted story while search proceeding against me with a senior lady officer and tried to shoot through my shoulder in the absence of my immediate boss which I vehemently resisted. I felt the divide in was complete and lack of camaraderie among wing colleagues as that was the last time I talked with the lady officer who was an amazing senior. Not able to take anymore frustration, it is then I volunteered to come out of Investigation wing after serving only for a year and half. I was not taken out of DG’s charge as I was the OUTSTANDING officer with unblemished record all along till I encountered Anurag Sahay, D K Jha and AK Agarwal.

Anurag Sahay, D K Jha and AK Agarwal could not digest my positive reputation as I was not part of their group, despite the fact that I was the only direct recruit IRS officer working at the level of AC/DC in Central Circle. Despite doing the best in 2006-07 my ACR rating of Outstanding by Reporting Officer Narender Kumar. Subsequently AK Agarwal, the Reviewing Officer rated my ACR to adverse on frivolous grounds. Please go through my ACR representation (http://sanghihari.blogspot.in/2014/12/basis-of-spoiling-my-acr-by-ak.html), the eyes will literally bleed.

Later I came to know that Narender Kumar lied to me by saying that he has given me OUTSTANDING ACR for year 2006-07, but the reality was that he was called personally by A K Agarwal to alter my rating thinking that A K Agarwal as Reviewing Officer will stop going after me. But the intention of A K Agarwal was to collude with D K Jha and destroy my career which was the ultimate design orchestered by Anurag Sahay sitting in the Headquarters. The TRIO (Anurag-Agarwal-Jha) thought I would cave in and go and seek mercy. But I gave a fitting reply and got the adverse comments expunged. The rot can be smelled at peak when I found that K R Pradeep, a notorious CA, who was covered by CBI for FCNR violation, had courage to come and ask an IRS Officer like me that “I should have approached him to get my ACR issue cleared with Anurag Sahay”.  K R Pradeep all his professional life before this incident was scared like a puny cat to stand before me as he could never break through me in any case in my career. This clearly shows that pimps were having great say in administration of Income-tax at Bangalore. Anurag Sahay went on record to threaten direct recruit officer when they were in threatening posture “If you do not fall in line then we will destroy your career just like Hari Rao. See Income-tax is like sugarcane, you should suck the juice how much is needed, and allow everyone to suck the juice.

Friends, this is the ordeal I was facing after serving in field in IRS as junior officer with just four years of service with amazing track record. But the TRIO were totally agitated when I came out unscathed. I learnt that they are making the next move to challenge my integrity to dig out file selectively only against the assessing officer, when it is a fact that I passed all the orders in central circle only by the knowledge of immediate reporting officer.

It is then I went to the chamber of Anurag Sahay in Headquarters, FELL AT HIS FEET and begged not to destroy my career as me and my family will suffer. I also went to  the chamber of A K Agarwal, in Central Circle, FELL AT HIS FEET and begged with incessant tears. But the TRIO knew that I was in the zone of promotion and it is the weakest spot they can hit me causing unbearable pain, which they did. I went before B R Sudhakara to help me (http://sanghihari.blogspot.in/2014/12/letter-to-br-sudhakara-pleading-not-to.html) but he turned a total blind eye to me. The TRIO did not show any mercy but took the strong support of Narender Kumar and Ajit Korde to prepare enough material in order to BURY me alive.

Tell me my friends from IRS FRATERNITY, what a junior officer in IRS with five years of FIELD SERVICE will do when you are surrounded by VULTURES led by UP BIHARI lobby to finish you just because you are working hard for IRS? It is then I decided that I will sell DOSA on ROAD but shall never beg before these unscrupulous elements. It is in 2008, I placed my resignation and went absconding from job for almost two years where I started working for my passion in COOKING. By this time the TRIO got me branded as “an officer under vigilance,” but every officer and official in Bangalore knew what the truth about me was and how harassment was bought upon me by the UP BIHARI lobby.

In two years time, I got promoted as JCIT despite placing the resignation and being out of job. My friends and family told me that “Hari why don’t you join back the job as you have been promoted and nothing has happened to you from Vigilance too, please give a try”. After great amount of pursuing I joined Madurai with regular three (3) JCIT charges and many a time seven (7) charges controlling almost south Tamilnadu. I travelled more than 10,000 KM every month physically visiting each office rather than calling files to my Madurai Office. Despite doing amazing work I could not shrug my VIGILANCE tag. The letters written as (http://sanghihari.blogspot.in/2014/12/protest-against-alkb-chand.html & http://sanghihari.blogspot.in/2014/12/protest-against-d-ravindraccit.html) will clearly bring out the agony of being tagged as an officer under vigilance. Friends please go through these two documents to know my agony of past ten years which was created by TRIO.

It is right to say forget and forgive the past especially when dead bodies of our own soul and family is not involved. But my question is why forget and forgive attitude was not shown towards me and it is now expected that we need to be reasonable with perpetrators of crime. What action the IRS fraternity will ensure to any junior officers like me in the beginning of their career. Now my surrounding with whom I worked have become seniors, who accept and sympathize my position in private but never support me open in public. Is’nt it the right time for all seniors to learn to behave and protect every innocent when the crime is going on, wherever it is.

We all must disown every IRS direct recruit officer who harm the interest of other direct recruit officer for their individual gain. Yes it is time to put the group solidarity as an IRS Family over individual petty interest. I know the dark hours of our time is over but if it is not treated at the right time it is bound to surface again,. The passage of time seems to have erased the intensity of crime of these wretched officers. They are also back with a sweet face thinking the IRS memory has forgotten their draconian past. I want every IRS Officer to stand up and show solidarity the way they showed against the torment of Revenue Secretary from IAS. I still find that our greatest enemy, not allowing us to rise is not IAS but the IRS officers like the TRIO.

Friends today I feel proud about myself as in the toughest time I was not seeking self pity or sympathy but was working to create a milestone in uncharted territory where I was neither from hospitality industry, nor I was an engineer but was only a commerce student. I have set high standards at the global level in THERMO DYNAMIC to become the first CIVIL SERVANT in India to win the DST-Lockeheed Martin IIGP and UNIDO GCIP Gold Medal, where I put Engineers from IIT Mumbai in second spot with huge margin as a lead. If this is what I could do when  I was helpless and alone then my friends what I could have done and achieved if I was there together with you all in IRS.

Just want to ask the IRS Family in Karnataka 

1. What you all will do with the TRIO if you were in my place? 
2. Will you show pity on DK Jha now when you were his victim of spoiling the ACR and creating false vigilance case? Please Answer honestly

But at the end I thank the TRIO for what I have achieved though the journey was full of sweat, blood and deep pain.

My official incidents with D K Jha at work.

Incident No.1	(During the inspection of cases by the Reviewing Officer, Shri DK Jha called at intercom)
D K Jha:	Hari in the case of A S Chinnaswamy Raju for the A.Y 2003-04, what is the status of penalty?
Hari Rao	Sir I’m given to understand that the assessee is in appeal. But the assessment in the case of A S Chinnaswamy Raju for the A.Y 2003-04 is a protective assessment and substantive assessment is in the A.Y. 2002-03.
D K Jha:	You have not concluded the penalty proceedings and you are in deep trouble and you will definitely loose your job if I tell CIT.
Hari Rao	Sir for academic interest, the penalty proceedings u/s 271(1)(c) is also a protective penalty proceedings and the matter is in appeal before the CIT(Appeals) and the penalty proceeding is kept in abeyance till the disposal of appeal then how will I loose my job?
D K Jha:	If I tell the same thing to CIT you will definitely loose your job and you will be giving clarification on this matter.
Hari Rao	Yes sir, I will definitely give the clarification on this matter to CIT.
	I was shocked and disturbed with this incident as I didn’t know why Shri D K Jha was threatening me about my career for no fault of mine? Immediately I brought this matter to the knowledge of Shri Narendra Kumar, Addl. CIT CR-2, who in turn pacified me to ignore this matter.

Incident No.2	(On being called by Shri DK Jha at his Office)
D K Jha:	Yaar, you don’t know how to write scrutiny report.
Hari Rao	Sir, what happened and which case?
D K Jha:	Its Srinivasa trust for the A.Y 1999-00 you have recommended no further appeal for the order of CIT (Appeals).
Hari Rao	Yes, I agree with scrutiny report as I personally went before the Chinna Sir. During Appeal, fresh facts were put before Chinna Sir which was not produced before me during the assessment. This evidence was core for the assessment. I told this fact to Chinna Sir and conveyed that the matter may be disposed off on merits.
D K Jha:	CIT is very annoyed for you not recommending second appeal and you will be in problem.
Hari Rao	Sir, why should I be in problem for my independent view? You have also agreed with my view and forwarded it to CIT. If you had a different view then you should have given your independent judgment.
D K Jha:	You have done a big mistake by not recommending for second appeal and you just go through Rule 46A.
	Shri DK Jha gave to me the IT Rules. After Going through Rule 46A I continued my discussion
D K Jha:	You change the scrutiny report as per Rule 46A as I’m going to change my observation and resend the proposal.
Hari Rao	Sir, I stand on my views and I don’t find any mistake and I’m going to stand on it.
D K Jha:	You are heading for problems with CIT unnecessarily. Just change the report and send it and close the issue as there’s no point in annoying the CIT.  I will prepare it and send it to you. But you have to also learn how to prepare Grounds of Appeal.
Hari Rao	Ok Sir you prepare everything and send it to me or call me I will come and sign it with my comments. Sir, Grounds of Appeal was earlier made by the CIT’s Office but from past few months we have been preparing Grounds of Appeal for which CIT is not happy. Why don’t you tell CIT to have a class or training on Grounds of Appeal for all the officers so that there will be uniformity in action.
D K Jha:	I will tell CIT and see what best we can do.

Incident No.3	(On being called by Shri DK Jha at his Office) I found that Shri Giridhar, ITI posted with me was already sitting in the chamber.
D K Jha:	Giridhar is not able to explain me anything about this matter, you tell me about it.
	I went through the assessment folder of M/s Polyflex (I) Limited for the A.Y 2003-04.
Hari Rao	Yes Sir, I have gone through what’s the problem?
D K Jha:	CIT has discussed this case with me. There’s no 11th schedule in Section 80IA in this Act.
	I went through the Income-tax Act.
Hari Rao	Sir you are holding the Income-tax Act, 2006 and seeing the Section 80IA. What was 80IA in A.Y 2003-04 is now 80IB in 2006 Act. In the same Act you can find the old changes.
	I took out the relevant changes and showed the old provision.
D K Jha:	Ok that’s fine. But you have not written the reasons at all in the assessment order for disallowing the claim u/s 80IA.
	I went through the assessment order of M/s Polyflex (I) Limited for the A.Y 2003-04.
Hari Rao	Sir, the reason is clearly written at point no. 4 of the order. This is a continuing issue from the past years. In this year I went for a factory visit. Later I recorded the statement of Shri Jagdish Nagapal, technical head of M/s Polyflex (I) Limited.
D K Jha:	Let me see it.
	Shri D K Jha went through the assessment order of M/s Polyflex (I) Limited for the A.Y 2003-04.
D K Jha:	Your order is not at all a speaking order.
Hari Rao	Sir, the original order was very detailed and Narendra Kumar Sir advised me to keep it short as the same matter was already in appeal.
D K Jha:	If Chandramouli would have been there, he wouldn’t have done it this way.
Hari Rao	Yes Sir, He’s Chandramouli and I’m Hari Rao. But if you were my boss I would have done the way you would have instructed it. Since my boss was Narendra Kumar Sir I did the way he has instructed me to do it.
D K Jha:	Ok. But I’m trying to protect you from CIT.
Hari Rao	Sir there’s no need to protect me from CIT as I’ve done no action which is malafide. The action which is bonafide also you take out small mistakes and make it very big.
D K Jha:	What to do I have to explain that to CIT?
Hari Rao	Sir that’s your problem. If I can explain you my problem then you should be able to explain your problem to CIT. Your action of fault finding rather than helping is creating general sense of unrest. We spend active part of life at office and ever since you took over there’s no fun at work place.