ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Day After

IT would be churlish to grudge Chidambaram the credit he has claimed for the "total and resounding" success of the scheme of amnesty for tax evaders he had introduced last year to tap the vast pool of 'black wealth' in the Indian economy in the cause of the country's development. Neither he nor his lieutenant in the ministry in charge of its execution, N K Singh, could have dreamt of a 'bonus' as big as this Rs 10,050 crore of revenue and nearly half a million declarations from recalcitrant taxpayers in the course of just a few months. Belittling the achievement as insignificant because what has come out is only the tip of the iceberg and so on will not do. Prognostications based on past studies on the subject including one in these columns (EPW, August 2, 1997), it must be acknowledged, have proved wrong, though at least one study cited therein did point to the possibility of success of an amnesty when meant avowedly to be a starter for an intensive campaign to round up the offenders. While there were repeated reminders of what was to follow for those who failed to avail of this "definitely" last opportunity to come clean, it is doubtful whether the warnings of a government that had lost its authority could have moved habitual evaders even one bit. The commitment given by a tottering government to the Supreme Court of no repetition of any amnesty "of this kind" in the future also could not have have been taken at more than its face value. What then did the trick? The question will no doubt be revisited by researchers engaged in finding an answer to the still intriguing question 'Why people pay taxes'. For a definitive answer one has to wait. A few observations and a note of caution may however be in order in the interim.

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