To what extent is the economy benefiting from the opportunity to whiten black money?

The proposed budget for the new fiscal year (2024-25) has been presented in the National Parliament. Drafting the budget for this fiscal year was a challenging task by any measure. The Finance Minister has successfully completed that difficult task.

The commitment to increase investment in personal accounts has been expressed in the budget for the new fiscal year. The necessary policies to provide assistance for personal account investments must be implemented. However, this assistance should be provided on fair and equitable grounds. Personal accounts cannot be granted unrestricted freedom to be used as a tool to wield economic power.

The conveniences provided in personal accounts are often misused in many cases. Assistance should be provided to personal accounts in such a way that they can acquire the capacity to compete seamlessly in the global market while meeting local demands. We want to increase investment, but simply increasing investment will not suffice. Measures must be taken to ensure that investment-driven establishments can enhance productivity by employing modern technologies. There is a deficiency in productivity across sectors such as education, health, and production. Initiatives must be taken to increase productivity in these areas.

In the new fiscal year, a 15% tax has been imposed without question to provide the opportunity for legalizing black money. Additionally, individuals can also legalize black money by paying a specified rate on land, flats, or apartments purchased in different areas. This opportunity has been provided for quite some time, but there is an opportunity to raise questions about how much the country is benefiting from it. Providing opportunities like this may not be supportive of legalizing black money.

In the proposed budget for the new fiscal year, it is crucial to allocate significantly more funds to sectors like health and education. The matter of reducing inflation, which is prevalent in the country's economy, has gained special importance. Various initiatives have been proposed to address this issue. However, I believe that reducing inflation cannot be achieved solely through budgeting or monetary policies. It requires coordinated efforts and integrated initiatives.

Author: Economist and Executive Director, Institute for Inclusive Finance and Development.