Following the crackdown on black money post Prime Minister Narendra Modi's announcement on demonetization of Rs 500 and Rs 1,000 notes last Tuesday, panic-stricken hoarders of black money—mostly jewellers, traders, politicians and bureaucrats across the country—are desperately looking for innovative means to convert their unaccounted wealth to white money.
There is good reason to worry. Investigative agencies have launched a crackdown and, so far, 400 jewellers across the country have been put under the scanner. The Central Excise Department has also sought details of all transactions by jewellers during the last four days.
But despite this, innovative ways are being found by offenders to wriggle out of the situation. Hoarders are offering a share of their illegitimate wealth to friends, requesting them to convert it into white money by depositing it in their accounts. This money is then returned to the original person six months later after a 20-40 per cent cut for the service.
A senior businessman confirmed the same to DNA. "Yesterday, one of my close friends who is a senior government official called me and offered to give Rs 30 lakh with a 20 per cent cut. He asked me to return Rs 24 lakh after six months in new currency. I had several accounts and the amount was a windfall for me. All of sudden my multiple bank accounts are flourishing with money."
A developer in Thane, Maharashtra confirms such transactions. He say that they are confidential and leave no scope for leaks. "If anyone leaks the information or give tips to the police, we will be in jail."
It's not just transferring funds to friends that's the modus operandi, there are other methods also. Sources in the IT department, who interrogated prominent traders after raids, told DNA that several businessmen have hired migrant labourers and workers, having identity proofs, to work for them on a temporary basis till December 31. This is the last day for exchanging old currency notes.
"All these workers have to do is to stand in queue before the bank to get the demonetized Rs 500 and Rs 1,000 currency notes changed. Once transaction is done, the labourers get between Rs 250 to Rs 500," said an Income Tax official.
Interestingly, many employers are believed to have even paid advance salaries for two to three months in old currency with the rider that they would return the same in white currency in the coming next two or three months. In one such case, a factory owner has brought at least 50 women in two tempos at a bank office located at Okhla and asked them to stand in a queue to get the demonetized Rs 500 and Rs 1,000 currency notes changed.
"These migrant labourers are being exploited by the businessmen," Virjesh Upadhyay, president of Bharatiya Mazdoor Sangh, told DNA.
Apart from bureaucrats, senior politicians too are under the spotlight. A senior politician whose total wealth is an estimated Rs 2,000 crore shared that he could not deposit all ill gotten wealth in official bank accounts.
"Even if I decide to deposit this money in the bank, the value of showing and depositing this money is virtually zero. The government is charging 30 per cent plus 60 per cent penalty and other taxes so in return we are getting nothing. Besides, we unnecessarily end up disclosing our name as black money hoarders. So, it is better to give it to a close person who will also benefit and we also get something in return. It has a dual benefit," a senior Congress leader said on request of anonymity.
The Congress leader said that it is was not just politicians from one particular party that was responsible for holding unaccounted cash, there were people from across parties who were hoarders of black money.
"In politics, no one can survive on white money and official transactions. During the elections, people demand money so we have to recover this money from some other sources when we are in power. We generally get the money in contract allotment and transfers. Currently, the ratio of this sweat deal is 80:20-to-60:40. The ratio depends upon the desperation and the relation of money holders," he added requesting anonymity.
