NEW DELHI: On a day after India's biggest tax reform came into force, Prime Minister Narendra Modi on Saturday vowed to continue the crackdown on black money and announced that the government cancelled registration of one lakh firms over the last 48 hours and was probing 37,000 shell companies on suspicions of funneling black money. Also, he said, 3 lakh other companies were under the scanner for suspicious transactions.
PM Modi patted his back for delivering on his promise to clean up the economy and cited recent statistics about the sharp decline in deposits by Indians in Swiss banks as one proof. "Those who have looted the poor will have to give back what they have looted," he said. But his 'I mean business' speech wasn't just aimed at the public at large outside, but the thousands of aspiring and practising chartered accountants gathered at the national capital's stadium as well.
He called them an important pillar of the Indian economy and appealed to their patriotism to nudge them not to help their clients fudge their accounts.
The prime minister said it required courage to act against a large number of companies as he had, and told them that this courage came from "desh bhakti", or patriotism. "Your patriotism is not less than mine," PM Modi told them. But, how is it possible that India had just 32 lakh taxpayers who declared an annual income of more than 10 lakh when there were 2 crore engineering and management graduates and 8 lakh doctors. When 2.18 crore people travelled abroad last year alone. That, he said, was India's bitter truth.
PM Modi asked his audience to take a pledge to bring people in the tax bracket rather than boasting about the number of clients they saved from paying taxes. It is said that a family which loses its house in a fire can stand on its feet, rebuild the house if they work together. But if one of them steals, there is no hope. The same principle applied for the economy too.
Holding a mirror to his hosts for the evening, the Institute of Chartered Accountants of India, PM Modi pulled out figures that showed just 25 chartered accountants (CA) had been penalised over the last 3 years for irregularities. And this, when over 1,400 cases have been pending for many years, he said.
PM Modi's stress on the chartered accountants comes against the government's stress on expanding the tax base. The GST - that merges dozens of central and state indirect taxes into a single tax - that was launched yesterday is the latest tool. Government officials have told NDTV that GST would not only bring more traders under the tax net but would also be used to identify people who were making money but not declaring income tax.
The prime minister told the CAs that the Constitution and society placed a lot of trust in them. "Your signature is more powerful than that of the Prime Minister and the government also believes the accounts signed by you," he said. But you have to decide whose interests come first; your client or the country.