TRACING AND RETRIEVING BLACK MONEY — India takes an important step

May 30, 2014 at 5:07 am | Posted in Uncategorized | Leave a comment
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A significant first step of a long fraught journey

Preamble ….. Just a couple of days before the curtains came down on UPA rule, the government received a stern directive from the Supreme Court to form the Special Investigation Team (SIT) to unearth and retrieve unaccounted money transferred illegally to banks abroad. On the day the Modi government held its first cabinet meeting, it had less than 24 hours to comply to this order from the apex court. No wonder, the Modi government moved swiftly to constitute the SIT. Thus, it became a feather in Modi’s cap notwithstanding the fact that the real credit goes to the Supreme Court, and not to the BJP whose support for such initiatives has been lukewarm in the past.

The powerful SIT is headed by Justice M.B. Shah as Chairman and has Mr. Arjit Pasayat, another retired Justice as the Vice-Chairman. It will be assisted by a formidable group of senior civil servants such the Secretary, Department of Revenue; the Deputy Governor of the Reserve Bank of India, and the heads of the Intelligence Bureau, the Research and Analysis Wing, the Enforcement Directorate, the CBI, the Central Board of Direct Taxes and a few other agencies. Its primary responsibilities include the investigation and prosecution of cases involving black money known more technically as unaccounted money.
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Indians have seethed and simmered at periodic reports in the media about Indian citizens transferring huge amounts of money to secret bank accounts abroad. The list of such offenders is suspected to include prominent names in the political establishment, businessmen and corrupted bureaucrats. These powerful people have so far fended off all attempts by prominent lawyers like Jethmalani, some very eminent parliamentarians, and even sitting Supreme Court judges to initiate steps to stop further outflow of money and bring back that which has already gone out. The law to prosecute offenders has been bent and broken to accommodate the mighty and the powerful.

 

In the past, Mr. Advani of the BJP made some noises in this regard, but, regrettably, these emanate mostly before elections. The intent has, therefore, always remained suspect. Mr. Advani remained in power for considerably long period of time, but did precious little in this regard.

 

The reason for such inaction is so abundantly clear. Everyone, who matters in Indian politics today, has his hands sullied in the sordid affair of black money. This explains why India has done so little to staunch the outflow of Indian taxpayers’ money offshore.

Except the Aam Admi Party, almost all the big political parties thrive with black money. The Congress Party started the trend, the BJP quickly caught up, and outfits like Samajwadi Party, DMK, Bahujan Samaj Party, NCP, AIDMK excelled in this nefarious practice of funds mobilization. All political parties have learned the efficacy of black money in garnering support during elections. The Congress and the BJP would get asphyxiated if black money vents are turned off before elections. This explains why these two parties so stubbornly resist the idea of opening their budgets to public scrutiny. Smaller political parties show rare unanimity of purpose with the larger ones in shouting down any demand for transparency in their book-keeping.

Things have come to a head now. Responding to terse directives from the Supreme Court, the Modi government has constituted a Special Investigation Team to prosecute the entities who generate black money stashed abroad. The SIT, will, in the process expose the offenders and help the government in repatriating the surreptitiously siphoned off money.

Despite the pervasive misgivings and cynicism about the sincerity of the political establishment to remove this malaise of black money, the news of the SIT should help dispel the air of resignation that has gripped the nation. Let us wish the SIT well. It has very eminent Supreme Court judges to lead it and almost all the top bureaucrats who have enforcement, monitoring, intelligence gathering and prosecution powers are included in the SIT. This makes it a very formidable set-up – the best the country could mobilize. As highly reputable retired justices lead the SIT (headed by Justice M. B. Shah), politicians will find it hard to deflect the prying eyes of the investigators.

 

The UPA, in full view of the vigilant public, had made a shameful bid to scuttle the SIT initiative. The Supreme Court order of July, 2011 to constitute the SIT was stalled by the government using all types of tactics. In its characteristic way, the Congress leadership failed to see the intense ire of the public in this ignominious bid. The Party has paid the price.

No doubt, the previous government with Pranab Mukherjee as Finance Minister, did participate in international efforts to bring an end to banking secrecy practices of a handful of countries. But, when it came to proactively moving to trace and reclaim money stashed away by Indians abroad, it held back. It did not want skeletons in its cup board to tumble out. The opposition led by the BJP made some perfunctory protests in the parliament, but their voice was mellowed and muffled. Their hesitation was not lost on the public.

 

However, the path ahead of the SIT is riddled with land mines. This is because any initiative to detect and bring back money from numbered accounts abroad will be opposed covertly by the mightiest politicians and businessmen of the country. Taking on these individuals needs nerves of steel. Mr. Justice Shah himself has already articulated this quite candidly.

 

No one knows, even with a wide margin of error, the quantum of money stashed abroad in secret accounts. The banks and the dodgy investment funds who accept the deposits use ingenuous methods to hide the identity of the depositors. They also facilitate re-routing of these funds to India, mostly for speculative trading in the Indian stock market. As a catalogue, they make use of the ‘Participatory Notes’ channel to gain access to investment in stocks. Who owns these highly suspect Participatory Notes is unknown even to SEBI. Demands to make this channel of investment more transparent were blocked by the outgoing finance minister Chidambaram citing some dubious technical problems.

The SIT must have reckoned the daunting challenges before it, and gauged the doggedness needed to deliver to the country what it has lost due to the greed and hideousness of some people. The SIT will have to contend with the highly restrictive provisions of the bi-lateral treaties India has for avoidance of double taxation. These provisions do not allow intrusive scrutiny of transactions of account holders who are suspected to have indulged in illegal funds transfers abroad.

Happily though, a set of global standards have been evolved by the OECD on ‘Automatic Exchange of Information in Tax Matters’. It is likely to come into force around 2017. India can use this to obtain information related to bank account details such as balances, interest and dividends etc. Such information helps in computing capital gains on the amounts transacted. But, enforcing the retrieval of the funds for credit to the public exchequer is far more difficult. This is where the SIT will need to give its best.
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Vocabulary building through short story – A Letter to God

May 28, 2014 at 1:38 pm | Posted in Uncategorized | Leave a comment
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Vocabulary building through short story….

A Simpleton’s Conclusion

[Adaptation of A Letter to God by G. L. Fuentes]

Lencho had built himself a house atop a hillock. It overlooked the river and his corn fields below. In this lone house, he lived with his family – his wife who had given him siblings in good number. The elder ones helped their father in the fields, while the younger ones played around the house. The corn plants were growing well with a profusion of flowers. The sight was the precursor of a bumper crop. It filled Lencho’s heart.

What was needed then was a shower or two of rain. It was not coming though. Lencho desperately yearned for the rain. Helplessly, he looked at the sky trying to spot some rain-bearing cloud.

The family had gathered for supper. From nowhere came the sound of raindrops falling. It set Lencho’s racing. The much-awaited rains had finally come! Lencho came out to find dark clouds looming over the north east hills. Lencho’s optimism knew no bounds. ‘My corn fields would now get what they so direly needed,’ he thought.

Rains fell and strong winds blew. But, misery came in good measure, too. The rain drops brought with them a hail of solid lumps of ice that came down with brutal force. They shredded the healthy corn plants of their leaves and flowers. What stood after the brief spell of hailstorm was the corn field shorn of its glory. In a matter of minutes, Nature’s wrath had fully ravaged the standing crop.

Lencho had never imagined his optimism would so soon vanish in thin air. Unknown to him, the first drops of rain had portended something very calamitous. For Lencho, it was a bolt from the blue. With the crop fully ruined, Lencho faced grim prospects. How could he feed his family, he pondered. He could grow another crop, but he had no money left with him to undertake that effort. He was a broken man now, reeling from the sudden turn of events.

He had nothing left, but he still had a precious asset – his profound faith in God. He knew the omniscient God was seeing his plight. Lencho was sure, He would listen if approached for help. He decided to reach him through a letter.

With hope rekindled in his mind by the thought of the Benefactor, he walked to the post office to write out his mercy plea to God. He scribbled a few words appealing for a donation of 100 pesos that could help him to plant another crop. He sealed and stamped the envelope with a one-word address – God. He dropped the letter in the letter box and walked back home convinced that his prayer would not go un-answered.

The postman saw the letter with the queer address. Quite taken aback and amused, he took the letter to the Post master – a burly, but benign man. On seeing the letter, he, too, burst out laughing. But, on second thought, he decided the letter was not a prank. He opened it, and saw the message it had. He read the fervent appeal of the farmer, Lencho, to God, the last savior. The Post master was moved at the earnestness of devotion of a simple but devout believer. He felt the appeal was too genuine to be scoffed at.

He took on the task of arranging the 100 pesos for the farmer. His colleagues butted in with small amounts. He gave a part of his salary to mobilize the amount needed. But, he could reach just 70 pesos, not the full 100 prayed for. Nevertheless, he put the amount in a cover, sealed it and wrote ‘Lencho’ as the addressee.

A week went by. Lencho returned to the Post Office to find that God’s reply had indeed arrived. With heart pounding with excitement and gratitude, he opened the cover to see just 70 pesos – 30 pesos less than what presumably God had sent him. He was distraught and quickly concluded that the ‘hideous’ guys in the post office had fleeced him of 30 pesos.

Bristling with resentment against the postal staff, he wrote another letter to God to apprise Him of the way he had been cheated by the crooked people who handled the letter! He asked God to send the rest 30 pesos directly to him instead of routing it through the Post Office!

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Answers to English Proficiency Test 5

May 27, 2014 at 9:05 am | Posted in Uncategorized | Leave a comment

Answers for English Proficiency Test 5 …

Error correction exercise …

1. The office building that collapsed last night was inaugurated six months ago.
2. In the book store, when I saw the magazine, I knew it was the one I had been looking for.
3. When I grow up, I am going to be a photographer.
4. Take your umbrella, it is going to rain.
5. The world’s supply of coal will soon run out.
6. Put on your court before you’ll go out.
7. I promise I call you as soon as I get home.
8. I will not be able to meet you next week. I will be staying in Delhi for a few days.
9. Can I borrow your camera? I will give it back to you tomorrow.
10. The bank has to change its image if more women are to be recruited.
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Answers for English Proficiency test 3

May 27, 2014 at 8:36 am | Posted in Uncategorized | Leave a comment

Answers for English Proficiency test 3

1. While in custody, the convict asked the police escort, ‘Do you mind if I have a drink?’

2. Lipa has been wondering about taking admission in the MCA course.

3. She went to a mathematics coaching centre to polish up her mathematics.

4. When he was alive, my father was always ordering my mother about. She used to get fed up obeying his commands.

5. A few days back, there was an earthquake. Suddenly, there was a loud bang from outside.

6. There have been many problems with the new laptop. We are thinking of returning it to the dealer.

7. It is difficult to know why the nurse left her government job.

8. The noise from the puja pandal continued for days. In a meeting of the community, it was accepted that a formal letter of complaint be sent.

9. I find it difficult to understand how she managed to live in Mumbai without a job.

10. The teacher said, ‘I find it unacceptable that students should be late for my class.’

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COMPREHENSION HELP FOR STUDENTS 1

May 27, 2014 at 4:52 am | Posted in Uncategorized | Leave a comment
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Comprehension help for students 1 ..

Questions …

a. High import bill of a country is not necessarily a bad thing. There might be some very desirable factors behind high imports. Discuss the issue.

b. Some economists are suggesting large increase in government investment in infrastructure, even though it means pumping of large amounts of cash into the market. Inevitably, this might further worsen inflation and increase the hardship of the common man on whose goodwill the government depends. These economists say, only through heavy infrastructure expansion, the country can grow economically in the long run. Discuss outlining your view.

c. What do the following words mean in English? Illustrate with sentences.

1. Buy the bullet
2. Go for the jugular
3. Pull no punches
4. Walk the extra mile
5. Golden handshake

d. Make sentences with …
Expect, Expectant, Expectancy, Exception

Answers on 30th May.
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English Proficiency Test Exercise — 5

May 26, 2014 at 3:35 am | Posted in Uncategorized | Leave a comment

English Proficiency Test 5 …

Error correction exercise …

There is at least one mistake in each of the following sentences. Correct them.

1. The office building that collapsed last night had been inaugurated six months ago.

2. In the book store, when I saw the magazine, I knew what I had looked for.

3. When I grow up, I we will be a photographer.

4. Take your umbrella, it might rain.

5. The world’s supply of coal is soon running out.

6. Put your court on before you’ll go out.

7. I promise I call you as I reach home.

8. I will not be able to meet you next week. I will stay in Delhi for a few days.

9. Can I borrow your camera? I will be giving it back to you tomorrow.

10. The bank has to change its image if more women will be recruited.

[Answers tomorrow.]
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Answers to English Proficiency test 2

May 25, 2014 at 5:07 am | Posted in Uncategorized | Leave a comment

ANSWERS TO English Proficiency Test 2 ..

1. The husband returns from his IT job thoroughly tired and surly. His wife plays soft music to help him unwind. [cope, de-stress, unwind]
2. There is a maze of rules and regulations in India which frustrate the foreign investors. In many cases, they partner with a local company to be able to navigate through the cobweb of government formalities. [circumvent, navigate, steer]
3. The BJP victory in the elections has left the Congress Party nonplussed. While M.Ps of the Modi brigade bask in their glory, defeated Congress candidates repent for having kowtowed the Rahul-Sonia leadership for far too long. [kowtow, cower, supplicate]
4. After serious discrepancies were observed between the postmortem report and the account of a few very credible witnesses in the murder case, the judge ordered the buried dead body to be exhumed. [examined, produced, exhumed]
5. During the long period of India’s freedom struggle, the vanguards of the movement mostly hailed from Bengal and Maharastra. [forerunners, vanguards, free thinker
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Answers to English Proficiency exercise 1

May 25, 2014 at 4:58 am | Posted in Uncategorized | Leave a comment

Answers to English proficiency test 1…

a. On a visit to Nandan Kanan, the guide told the visitor, ‘This large flamingo is only living in the jungles of Siberia.’

Corrected sentence …. On a visit to Nandan Kanan, the guide told the visitor, ‘This large flamingo lives only in the jungles of Siberia.’

b. The family friend, while observing the two sisters, said, ‘Lipa is resembling Lucy.’

Corrected sentence …. The family friend, while observing the two sisters, said, ‘Lipa resembles Lucy.’

c. The farmers plough the field only after their landlord paid them their back wages.

Corrected sentence …. The farmers ploughed the field only after their landlord paid them their back wages.

d. We have seen the dreaded burglar Jatin the other day.

Corrected sentence … We saw the dreaded burglar Jatin the other day.

e. One of Lipa’s friends asked her, ‘How long are you wearing glasses?’

Corrected sentence … One of Lipa’s friends asked her, ‘How long have you been wearing glasses?’

f. We’ve been staying with Lipa and Lucy until last weekend.

Corrected sentence … We’ve were staying with Lipa and Lucy until last weekend.

g. That’s twice I’ve been forgetting to add sugar to my husband’s coffee this week.

Corrected sentence … That’s twice I’ve forgotten to add sugar to my husband’s coffee this week.

h. I was meeting a lot of bright young men while I was working in Bangalore.

Corrected sentence … I met a lot of bright young men while I was working in Bangalore.

i. Have you read the book The Moon and the Six Pence? Who has written it?

Corrected sentence … Have you read the book The Moon and the Six Pence? Who wrote it?

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English Proficiency Test Exercise 3 & 4 — Civil Service & MBA

May 25, 2014 at 4:04 am | Posted in Uncategorized | Leave a comment
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English Proficiency test 3

Correct the following sentences. There is at least one mistake in each.

1. While in custody, the convict asked the police escort, ‘Do you care if I have a drink?’

2. Lipa has been wondering taking admission in the MCA course.

3. She went to a mathematics coaching centre to polish her mathematics up.

4. When he was alive, my father was always ordering about my mother. She used to get fed up obeying his commands.

5. A few days back, there was an earthquake. Suddenly, it was a loud bang from outside.

6. There has been many problems with the new laptop. We are thinking of returning it to the dealer.

7. Difficult to know is why the nurse left her government job.

8. The noise from the puja pandal continued for days. In a meeting of the community, it was accepted to send a letter of complaint.

9. I find difficult to understand how she managed to live in Mumbai without a job.

10. The teacher said, ‘I find it unacceptable that students should be late for my class.’

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English Proficiency Test 4

Creative writing exercises using imagination

Example … A woman has been arrested and produced before a magistrate on a murder charge. She has bludgeoned her husband.

The conversation between the two in the court room will proceed somewhat like this.

Magistrate … What is your name and where do you live?

Accused … My name is Basanti Newhal. I line in Kanpur.

Magistrate ….Why did you kill your husband like this?

Accused … Sir, he was a drunkard and a womanizer. He used to beat me and taunt me daily citing my figure and praising that of his mistress. I could take it no longer as my daughter grew up and realized the sad state of affairs in the family.

Magistrate .. Why did you not seek divorce? Why did you not approach the police for help? Why you took such an extreme step?

Accused .. I was forced to. That night he brought his mistress along to our house. Both were drunk. Both began to taunt me. It was too much for me to bear, as my daughter was watching all these in horror. I took out a heavy wooden piece and hit him in great rage. Unfortunately, he succumbed to his injuries.

Magistrate .. I understand, but the law will take its course. You may engage a lawyer to plead your case.

Accused .. Hon’ble Sir, my husband is dead. Iam a widow now. I have no means of livelihood. My grown-up daughter will have to fend for herself. She is so vulnerable now. I am in jail. My cup of woes are full. I can not engage a lawyer. I cant afford it. Please give me death sentence. I have no wish to live.’

Magistrate.. No, don’t lose hope. You make an application. I will have an advocate engaged for you at government cost.

Accused .. Thank you Sir. God bless you.
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Question 1 .. A girl has just received her half-yearly examination’s mark list. She has scored 80 % average with 100 out of 100 in mathematics. However, she has failed in History with just 25 out of 100. She tiptoes her way to her father’s side and with heart pounding in fear, hands over the mark sheet to him. Set up a conversion between the father and the daughter.

Father …

Daughter ….

Father ….

Daughter …..

Father …..

Daughter ….

Father ….

Daughter ….
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Question 2 …

A school boy has gone to the sea beach in Puri. He sees a fishing boat returning from the sea. With great curiosity, he proceeds to see what he has returned with. To his dismay, he finds nothing except a small basket of assorted fishes. Set up a conversation between the Fisherman and the boy.

Fisherman…

Boy …

Fisherman …

Boy …

Fisherman…

Boy ….

Fisherman…

Boy ….

———Model answers will be posted on Wednesday for both exercises.———————
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Civil Service & MBA inputs –Consumer Price Index (CPI)

May 24, 2014 at 5:55 am | Posted in Uncategorized | Leave a comment
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Consumer price Index…

As the name suggests, the Wholesale Price Index (WPI) is not very relevant for the common man. He never buys 10 tons of millet or one ton of potatoes or 100 tons of steel. So, how can these prices reflect the actual level of inflation affecting the common man? It is price in the neighbourhood provision stores or the local markets that really matters for the common consumer. Due to obvious reasons, these prices are considerably higher than the wholesale prices.

There has been a clamour among experts and common people to switch to CPI from WPI for assessing the level of inflation.

The CPI is measured for three different purposes.

a. Consumer Price index for Industrial Workers (CPI-IW),
b. CPI for Agricultural Labourers (CPI-AL), and for
c. CPI for Urban Non- Manual Employees (CPI-UNME)

The rationale for such trifurcation of the CPI is pertinent because the consumption pattern of the three types of people varies considerably. Consequently, the weighting diagram for Consumer Price Index is constructed on the basis of average monthly family expenditures by different consumption groups. The items taken for price survey are
Food,
Pan, Supari and Tobacco,
Fuel and light,
Housing,
Cloth, and bedding
Medical care,
Education,
Recreation,
Transport,
Communication etc.

The data for the CPI are compiled on a monthly basis. It is based on the Income and Expenditure survey by NSSO in 78 selected centers. This index is important because it is used for determining the dearness allowances of Central and State Government employees. It also forms the basis of fixation of wages of workers in the organized sector.

How to Calculate Consumer Price Index

A CPI takes a certain basket of common goods that are generally consumed by a certain group of consumers. The calculation of the CPI is done as below.

Step 1
Select a base year for the consumer price index. The base year is always set to 100.

Step 2
Select a basket of goods and add the prices of all the goods in your base year. For instance, if you choose 2000 as your base year and choose a kg of rice, a dozen of eggs or a unit of electric power. Add the prices of these three goods in the year 2000.

Step 3
Select the year for which you want to calculate the CPI and add the prices of all the goods in your basket of goods for that year.

Step 4
Divide the price of the basket of goods in the year for which you are calculating CPI by the price of the basket of goods in the base year and multiply the result by 100 to calculate the CPI in that year. For instance, if your basket of goods cost Rs. 1500 in 2000 and Rs.1800 in 2013, you would divide 1800 by 1500 and multiply the result by 100 to calculate that the CPI. It comes to in 2013 is 120. This means prices increased 20 percent from 2000 to 2013.
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