The President Takes Over

by Bhaskar Sarkar

Search for Black Money

  The amnesty period for putting cash into bank was almost over. About a thousand crores had been deposited in the banks. But this did not match the estimated figures of black money in the country. The President decided that preparations must be made to ferret out the black money. He called the Army Chief, the Police Chiefs, the heads of the income tax and enforcement directorates of each state and Delhi. He said that the most important business areas and residential areas were to be searched to unearth black money. The areas to be searched would be decided by the president himself, the day before the raids. There would be one hundred joint teams of the Army, Police, Income tax and enforcement directorate for each metropolis and 50 teams for each semi metropolis. Each team would have at least three police women to deal with the women. The searches would be video recorded. As usual press would be free to move about and record the events. The Army will cordon off the selected area and search all incoming and out going vehicles or persons. However movements of personnel would not be stopped under any circumstances. Cash, gold and foreign currency over and above the limits laid down will be confiscated and credited in the nearest nationalized banks. The deposit counters of all nationalized banks would remain open as long as required. The teams should be formed within three days. The operations would start on the orders of the President.

  Three days later, the President sat down with the Chief of Army Staff and maps of each of the metropolis and the cities. He marked the areas of Chandni Chowk, Caunaught Place and Defense Colony of Delhi, Fort , Nariman Point and Pali Hills in Bombay, Parrys, Nugambakkam and T Nagar of Madras , Bara Buzzar , Dalhousie and Bhowanipur areas of Calcutta , Banjara Hills of Hydrabad and so on. The Army Chief passed on to the messages to the respective commanders. By dawn, the next day the areas had been cordoned off and the searches began. The searches continued for three days. Every house or business premises in the area was thoroughly searched. There were many heart rendering scenes. Some women held on to their bags of gold ornaments. Mighty businessmen prostrated themselves at the feet of the raiding parties and begging for forgiveness and promising to deposit the cash on the morrow. Some even offered huge bribes to the teams to let them go. It had worked earlier but now, with so many agencies and camera teams involved, it did not work. Some of those raided developed heart problems and had to be evacuated to hospitals. There were many crestfallen faces.

  Almost all business activities came to a standstill on news of the raids. They were on every news bulletin. The nation watched with great interest as the totals of the seizures kept going up. Others with black money watched with great apprehension wondering when their turn would come. At the end of the three days, a little over 5000 crores, over two million worth of foreign currencies and over one ton of gold had been seized.

  The President was not satisfied. Much more had to come out. But he gave another amnesty period of ten days. This time the results were better. About 15,000 crores and about 100 tons of gold was declared and deposited in the banks. The President examined the recoveries from different areas. He felt that the declaration from small towns and rural areas was still not adequate. He started the raids all over again. This time he targeted the large farmers, doctors, lawyers and other professionals, large contractors, jewelers and businessmen who had large houses, telephones and cars. This resulted in seizure of another 5000 crores and another 100 tons of gold over a period of a month. He then gave another amnesty period of ten days. This time over 10,000 crores and 200 tons of gold were deposited in banks. So at the end of three months of emergency, over 50,000 crores had been deposited in banks and about 500 tons of gold had been declared. The government had seized over Rs 10, 000 crores and after the tax on the money deposited in the bank had been collected, the revenue of the Government had gone up by over 35,000 crores. With about 300 tons of seized gold in the kitty, the President ordered the sale of gold by counters of the nationalized bank at the market rate as announced in the news papers. The demand for gold also decreased. The prices of gold fell by over Rs 3000 per 10 gm making smuggling gold extremely unattractive.

  The banks became flush with funds. They did not know what to do with the money. They desperately looked for people to whom money could be loaned. All banks started housing loans and loans for financing cars and other consumer goods. The interest rates fell by one percent.

  Shops and restaurants catering to conspicuous consumption were in for bad days. People were no longer forced to spend cash. The market for premium consumer took a beating.

  Hawala (illegal foreign exchange traders) dealers had also been mauled. Sacks full of their money had been confiscated. This led to a breakdown of their payment system. The people remitting money through these channels began to loose faith in the system. They now opted for normal banking channels. The foreign exchange remittances increased and the foreign exchange reserves improved. The Rupee became stronger in the foreign exchange market. The import bill began to reduce.

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