The biggest scam from India

The biggest scam from India

2016, Nov 19    

I’m going to talk about a scam by Indian population and not by any government. You must have heard about the 2G scam (₹1,76,000 crore) or the Coalgate scam (₹1,86,000 crore), but they will seem small what I have for you.

You must have seen these local shops (including all kinds, from grocery to fruit seller, from mobile phone shops to electrical appliances shops, from medicine shops to private hospitals) around you. Most of the time, whatever you buy from them, they don’t give you an authentic bill with TIN number on it. Why? Because then they will have to pay the income tax on the income of all the accounted money(not sure about the retail sales tax though) to the government.

Lets try to realize the unaccounted money that flows through this system:

  • Average amount of transaction per shop per day ~ ₹5000.
  • Number of shops per town in a district ~ 8000
  • Number of towns per district ~ 10
  • Number of districts in India ~ 650 (686 to be precise)
  • Total unaccounted transaction per day ~ ₹26,000 crore
  • Total unaccounted transaction per year ~ ₹95,00,000 crore

The amount above is the lowest estimate. Extrapolating or exacting it, will at least double this amount. I’ll leave it to you to calculate the tax money government will get on this unaccounted transfers. We the people of India accuse the government on daily (even hourly basis) for a system not good enough for us. Guess what, we are part of it. It’s because of us system is not good. We are afraid to pay taxes, but we forget that in long term, that money comes to us in form of protection (army expenditure), education (universities), research (ISRO and DRDO), infrastructure (metro rails), etc.

Edit1: I have to mention it clearly. The above amount is not the tax amount government should get but It’s the unaccounted money that flows through the system. Tax calculation on it may lead to a small number (but still be huge and significant). How is this amount unaccounted? Till the time a salaried employee is holding Rs.100, the government has a track of that money, but as soon as he/she transacts that money with any goods without taking proper bill, the government lost it’s track!!

Edit1: This problem will be solved with so many online and mobile linked payment gateways, specially UPI.