Black Money crackdown set to Intensify

March 14, 2017 · Author: · Category: / 

As per state election results declared by the Election Commission on March 11, 2017 the BJP performed exceedingly well in the largest Indian state of Uttar Pradesh (UP) where it managed to capture 77% of the seats. It is worth noting that this is a historic victory as is evident from the time-series data on the seat share and vote share captured by the winning party as compared with the previous UP elections.

Policy-making in India is likely to continue being ad-hoc after BJP’s massive victory in UP. This will entail no specific over-arching ideology informing economic decision-making. Moreover, expert opinion is likely to continue being given a low priority with political motives guiding economic decisions.

Black money crackdown is likely to be furthered after BJP’s victory through two means: (1) the Government using various analytics driven tools to detect tax evaders; and (2) the use of the Benami Transactions (Prohibition) Amendment Act which was passed by the both houses of the Parliament in CY16.

Decision-making framework will be further centralised under NDA-II whereby the PM takes the majority of the key decisions for most ministries. Furthermore, a range of institutions and their independence is likely to remain compromised under this scenario.

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