The Next Battle

Sree Iyer

There was no time to lose. The Prime Minister instructed the Governor of the Reserve Bank of India to phase out the Rs.2000 and Rs.500 denomination notes over the next six months. A tender was floated to purchase software that would track the movement of unaccounted money of Indians lying in various tax havens across the country, in real time. The American firm got the order as it exclusively met the parameters laid down. Part of the deal was to have the software delivered in flat eight months’ time.

The United States had enacted stricter norms for tracking money laundering by establishing a new division called the Office of Foreign Assets Control (OFAC), which monitored rogue regimes, terrorist groups and money laundering by other countries. It thereby tightened the laws around tax havens to make them more accountable. India and the US began co-operating closely to track the menace of black money and the results started to show. The huge corruption machinery could not be ground to a halt overnight, but some breaks were put in place.

The Finance Ministry’s senior bureaucracy was completely revamped with newer people, chosen for their credentials and impeccable integrity, besides their alignment with the government’s vision. The oversight committee headed by Govindan Ramaswamy too was notified and it began to function without delay.

Everybody worked extra hours to implement the changes. But that was the easier part. The more difficult one was the decision on abolishing income tax. The Prime Minister felt that it would be too hasty to do away with personal income tax in one go, an opinion that CK shared. It was, therefore, decided to completely abolish income tax on earnings up to Rs.10 lakhs per annum, and keep the maximum tax at 10%. This in itself was revolutionary for now. Govindan saw the logic in it and concurred.

Meanwhile, probes into the various scams had picked steam. The noose began to tighten further around Maida and Dalda, who had been out on bail. There was no saying when they would be rearrested on other charges as the investigations progressed.

The cumulative impact of the dramatic monetary decisions began to be felt in about a year’s time. The salaried class was ecstatic; it now had more money to spend and save. Demonetisation too had begun to yield results.

Prime Minister Jadeja finally had something concrete to show on the financial front. The already crumbling Freedom Party was further slipping into irrelevance. Since its main agenda was to criticise the policies and decisions of the Jadeja government, it was almost jobless. It could not possibly criticise the move to empower the salaried class or withdraw the high-value currency, especially when the RBI had pumped in enough of the new, smaller notes into the system. Every time a leader of the party went to jail, they kept crying political witch-hunt. But not many were swayed by their crocodile tears anymore. It was a new beginning for the nation, the average age of which was 27 years. Young India was here, clear and confident of what it wanted to achieve.

Meanwhile, another country, in India’s neighbourhood, lurched deeper into anarchy. Yet its intelligence wing plotted away…