CM targets black money bulldozer - Mamata speaks out against 'harassment' of industrialists

Mamata Banerjee speaks at the Bengal Global Business Summit on Saturday. Picture by Amit Datta

Devadeep Purohit, Meghdeep Bhattacharyya and Abhranila Das, TT, Calcutta, Jan. 9: Mamata Banerjee today threw her weight behind India Inc and became the first prominent politician to voice serious reservations about the manner in which regulatory authorities have started hounding businessmen under the pretext of tracing black money.

Prime Minister Narendra Modi had promised in the run-up to last year's general election to ferret out black money. But a special scheme announced in this year's budget to invite black money disclosures turned up a paltry Rs 2,428 crore - about a fourth of the Rs 10,000 crore thrown up by P. Chidambaram's voluntary disclosure of income scheme in 1997 - deepening the Modi government's embarrassment and increasing the ferocity of the regulatory raids.

Until now, all the talk about "harassment" has been confined to company boardrooms, and industry associations have maintained a stoic silence on an issue that has deeply troubled industry shoguns.

Sources close to the chief minister said she raised the topic in her concluding address at the Bengal Global Business Summit to win the trust of the business community.

"We don't want to harass industrialists. A message must go from the Bengal Global Business Summit. Our appeal should be to all the governments... it is not good for industry if industrialists are harassed. They should be left in peace," she said to loud applause from the audience.

Sources close to Mamata said there have been reports that some prominent businessmen have started mulling the option of becoming non-resident Indians - a tax status that may offer some protection against marauding taxmen.

One of the major reasons behind the fear, a chartered accountant said, was concern that even a person paying taxes and penalties on previously undeclared assets might face prosecution under the Prevention of Money Laundering Act (PMLA).

The black money law, officially known as Undisclosed Income and Foreign Assets Act, does not say fresh declaration of undisclosed money or properties abroad will not be used as evidence for prosecution under PMLA, the chartered accountant explained.

"Let industry run; the money should flow. The country will benefit if the money flows from industry," Mamata said.

She suggested an ingenious way to resolve the problem: she said the government should raise the investment that companies above a certain size are required to make in corporate social responsibility (CSR) projects, designed to promote social welfare.

Companies with a turnover of over Rs 1,000 crore or a net worth of Rs 500 crore are required to spend at least 2 per cent of their average net profit in the three immediately preceding financial years on CSR activities.

"Instead of harassing them, tell them you give more for CSR. You increase your CSR (contribution) to up to 5 per cent," Mamata added.

A source explained that the chief minister was convinced that the fear in the minds of India Inc was acting as a "deterrent" to investment in Bengal and so she tried to address it.

"I can't go every day for raids... I can't bulldoze you. We have to see that the businessman has some flexible system also. We have to give them the space... so that they can come up with a specific vision," Mamata said.

"If everybody is afraid -'Oh my God, tax people are coming, oh my God, where will I keep the money', then they'll be afraid."

According to sources in the ruling establishment, Mamata's polemic could have been inspired by the applause Delhi chief minister Arvind Kejriwal received at the summit yesterday when he sympathised with business on its everyday travails in the country.

Aware that her defence of businessmen might prompt the Opposition to question her stand on black money, she clarified that she was keen on tracing black money.

"Black money is different - and harassing is different. Black money, wherever you have, you collect it; we will be very happy if you can bring back that black money," she said.

The need to attract business to Bengal may not have been the sole reason for the chief minister's uncharacteristic comments on the raid raj against businessmen. Mamata, with "Maa-Mati-Manush" on her lips, has always been more comfortable talking about the atrocities on the poor.

"She wants to establish that the BJP is engaging in vendetta politics, be it with politicians or with businessmen," said a Trinamul source.

Mamata was among the first politicians from outside the Congress to stand by Sonia Gandhi and her son Rahul when a court ordered their personal appearance in the National Herald case.

By her own recent admission, Trinamul Rajya Sabha MP and actor-entrepreneur Mithun Chakraborty had stopped staying in touch out of fear after the former brand ambassador of Saradha was questioned by the Enforcement Directorate.

Another Trinamul Rajya Sabha MP, entrepreneur Srinjoy Bose, who was arrested by the CBI in connection with the Saradha scam, quit the party and resigned from the upper House immediately after he got bail.

Mamata had told a rally in Calcutta in November that the Modi government had "unleashed" the Enforcement Directorate on her associates.

Calling central probe agencies "political tools", she said the Centre was trying to go after Bengal's brand ambassador, actor-entrepreneur Shah Rukh Khan - principal owner of the Kolkata Knight Riders - because he was close to her.

This was after three ED summons to Khan in connection with the ongoing investigations into irregularities in the Indian Premier League.

"I can assure you in Bengal I'll not allow anybody to disturb you... Even if there is any problem, we will negotiate. We will give them the time to sort it out," she added.