On November 8, 2016, the Prime Minister of India announced the Demonetization of the High-Value currency notes. The government attempted to tackle, in a single stroke, three main malaises plaguing the economy—a parallel economy, counterfeit currency and terror financing. It was anticipated that 20-30% of the currency notes would not make it back to the legal system and the terror financing will be crippled. However, in a country where most consider paying taxes to be a punishment and corruption is the part and parcel of life, could such a monumental exercise succeeded without any hiccups. While the majority of the honest Indians waited in lines patiently to obtain their very own hard-earned money, the corrupt amongst us found new and innovative ways to exchange their ill-gotten cash in collusion with the bank and regulatory bodies.
The demonetization failed, or so we were told by the Media and the Intelligentsia. They backed up their words by presenting the annual report presented by the RBI which stated that a staggering Rs 15.28 lakh crore of the Rs 15.44 lakh crore banned currency or 98.96 percent of the total value of scrapped Rs 500 and Rs 1,000 notes had found their way back to the banking system.
Prima Facie, Demonetization has failed to unearth the massive body of black money that everybody knows exists in our nation. Any leader would lose heart over this monumental failure. But not Narendra Modi. Realizing that the Corrupt Indian is not ready to give up, he let loose the formidable Income Tax Department armed with the most modern Digital Tools.
The corrupt, drunk in a stupor of vice or foolish enough to not understand the prowess of technology, had ignored one key fact. They thought that merely depositing their black money in the banks will make it white. Well, could they be more wrong? Every note had left a trail. Every bank branch got a certain amount of cash. Every account before Demonetization had a certain average amount of deposits. The data in question was no doubt huge but this was a potential gold mine and with the right tools, the IT department could religiously and rigorously enforce tax compliance for all. It was now up to the Income-tax department to establish their guilt and bring the corrupt to the court for justice.
Hence as part of Operation Clean Money, collection, collation, and analysis of information on cash transactions were performed by an extensive use of information technology and data analytics tools for identification of high-risk cases, expeditious e-verification of suspect cases and enforcement actions. The Government with the help of the IT Company, L&T Infotech, initiated the Project Insight. Project Insight uses big data analytics to match information from social media sites to deduce mismatches between spending pattern and income declaration. The government has also made linking of PAN with Aadhaar mandatory to get a 360-degree view of a person’s income and assets. This would enable the government to catch tax evaders in a non-intrusive manner using technology and without traditional intrusive methods like search and seizure.
So, while the corrupt celebrated, the honest waited and the media forgot about the Demonetization, the IT department was quietly at work. Once the analysis started to fit in a frame, the IT department swung into action. It issued nearly two lakh notices to persons who deposited an unaccounted sum of Rs. 15 lakh or more in their accounts during the demonetization period in November 2016. The people in question have now been asked to explain the source of funds failing which, strict judicial action will be initiated against them. However, this is merely the tip of the iceberg. The Prime Minister’s continued efforts for a corruption free India should be lauded. His unconventional and sometimes, discomfiting policies are only for the betterment of our great Nation. Demonetization was not the end, merely the beginning of the end of the corrupt. For my honest brethren, my only advice is to grab a popcorn and enjoy the show. For the corrupt, only one thing can be said. Make amends with your God, your country, and your government, for the Indian Income Tax Department is out on your hunt.