PM Modi says Aadhaar will be used to track corruption, benami properties

November 30, 2017 143 Views No Comment

Prime Minister Narendra Modi said on Thursday the 12-digit biometric Aadhaar number would be used to track assets bought with slush funds in a proxy’s name, better known as “benami property”, reaffirming his government’s resolve to crack down on corruption.

Modi’s statement at the inaugural session of the 15th edition of the Hindustan Times Leadership Summit confirms reports of the government’s plan to use the unique identity number for property transactions, a sector where the use of black money is rampant.

The move to clamp down on benami transactions follows a series of measures the government has taken to combat corruption. Modi said measures such as demonetisation and a new goods and services tax had left the corrupt scared and brought black money into the formal economy.

“There is a behaviour change in the country you can see today… the corrupt are afraid to deal in black money and there is a healthy and clean corporate culture,” he said.

Saying he was ready to pay a political price for fighting corruption, Modi described Aadhaar, which is facing legal challenges over privacy concerns, as an irreversible change, a term he used to play on the HT summit’s theme of The Irreversible Rise of India.

“By linking Aadhaar to mobile and Jan Dhan, we have created such a system that could not have been imagined few years back,” the PM said.

Linking Aadhaar with property deals is part of a strategy to profile assessees in the light of asset ownership, lifestyle and spending pattern and the income reported in tax returns.

The Prime Minister said the information the clampdown on cash had unearthed on the black economy was a treasure trove that would help India in its war against corruption. “Demonetisation brought in proof of black money… finished parallel economy,” he said.

According to the income tax department, post-demonetisation, 14,000 people who bought property worth more than Rs1 crore each but had not filed tax returns, have been identified.

Since the benami transactions (prohibition) act was notified on 1 November last year, the tax department has attached 475 properties worth over Rs 1,600 crore.

“With biometric identification (Aadhaar) getting linked with property transactions, masking of identity of the owners will not be possible. It will help the authorities to comprehensively profile the owner and enable them to ask explanations for the source of funds used to acquire assets,” said Rahul Garg, partner, tax and regulatory, PwC India.

The government is pushing the use of Aadhaar, saying it is necessary to plug leaks in its subsidy schemes for the poor and ensure benefits reach those targeted. Also the government hopes to ensure financial transparency by pushing people to link Aadhaar to bank accounts and other services.

“In 2014, people didn’t vote only to change the government. They voted to change the system; they voted for a system that is permanent, irreversible…a system that is corruption-free, citizen-centric and development-friendly.” Modi said.

Source: The Hindustan Times