THE HINDU Editorial Vocabulary- November 30, 2016- Topic 1
The amendments to the Income Tax law passed by the Lok Sabha now offer those with unaccounted cash a last shot at amnesty. They can pay
half their cash as tax and deposit a quarter into a new Pradhan Mantri Garib
Kalyan Yojana. Those who fail to do this voluntarily for bank deposits made
since November 8 would end up retaining about 15 per cent of the total amount
if they cannot establish a legitimate source for the funds. There is a
Robinhood-esque edge to the PMGKY approach, directly linking the war on black
money to welfare of the poor. Essentially an extension of the recent Income
Disclosure Scheme that cleaned up about Rs.65,000 crore of undeclared income by
levying 45 per cent tax, the December 30 deadline for bank deposits in
demonetised notes gives a more purposeful push to the effort to clean out all
the cash in the grey economy. The scheme for disclosing foreign assets last
year had yielded just about Rs.2,400 crore in taxes, so a tougher approach was
perhaps necessary to instil real fear among habitual tax evaders. Since the
demonetisation of currency notes worth an estimated Rs.14.18 lakh crore, nearly
Rs.8.45 lakh crore has been brought back into the system. If the proportion of
notes deposited or exchanged is in line with their circulation prior to
November 8, about Rs.2.56 lakh crore in Rs.1,000 notes and Rs.3.17 lakh crore
worth of Rs.500 notes (that can be spent on exempted categories till December
15) is still out there.
Many clever ploys have been
attempted to subvert this drive and convert black money into white: hiring
people to exchange currency; tapping cash-in-hand entries of firms to launder
illicit cash; pumping funds into bank accounts for the poor; purchasing goods
in bulk where old notes are still allowed; even tipping off the taxman to
conduct search-and-seizure operations on one’s own premises to avail of a
provision that allows individuals to pay a mere 10 per cent penalty on such
income if they admit to it. The government is trying to close the door on such
ingenuity, and the latest tax law changes should be seen in this context. By
early January, it will be clear how much money has been mopped up by the
demonetisation operation. There is, however, no doubt that this tax manoeuvre
is a neater way of gaining fiscal headroom than extinguishing the Reserve Bank
of India’s liabilities to the extent of unreturned old Rs.500 and Rs.1,000
notes, and turning that into a special dividend to the exchequer.
Vocabulary
Amnesty: an official pardon for people who have been convicted of political
offenses.
Example: An amnesty for political prisoners
Synonyms: pardon, pardoning, reprieve, grace, release, discharge
Legitimate: conforming to the law or to rules.
Example: His claims to legitimate authority
Synonyms: legal, lawful, licit, legalized, authorized, permitted, permissible
Edge: the outside limit of an object, area, or surface; a place or part farthest
away from the center of something.
Example: A willow tree at the water's edge
Synonyms: border, boundary, extremity, fringe, margin, side, lip, rim, brim, brink
Yield: give way to arguments, demands, or pressure.
Example: The Western powers now yielded when they should have resisted
Synonyms: surrender, capitulate, submit, relent, admit
defeat, back down
Instill: gradually but firmly establish (an idea or attitude, especially a desirable
one) in a person's mind.
Example: How do we instill a sense of rightness in today's youth?
Synonyms: inculcate, implant, ingrain, impress, imprint, introduce, engender
Ploy: a cunning plan or action designed to turn a situation to one's own
advantage.
Example: The president has dismissed the referendum as a ploy to buy time
Synonyms: ruse, tactic, move, device, stratagem, scheme, trick, gambit, plan
Subvert: undermine the power and authority of (an established system or
institution).
Example: An attempt to subvert democratic government
Synonyms: destabilize, unsettle, overthrow, overturn, bring
down, topple
Launder: wash, or wash and iron, (clothes or linens).
Example: He wasn't used to laundering his own bed linens
Synonyms: wash, wash and
iron, clean, dry-clean
Illicit: forbidden by law, rules, or custom.
Example: Illicit drugs
Synonyms: illegal, unlawful, illegitimate, criminal, felonious, outlawed, banned
Ingenuity: the quality of being clever, original, and inventive.
Example: In every way - performance, build quality, ingenuity of design - it is the
better car.
Synonyms: inventiveness, creativity, imagination, innovation, enterprise, insight
Mop: clean or soak up (something) by wiping.
Example: He was mopping his plate with a piece of bread
Synonyms: wash, clean, wipe, swab
Headroom: the space above a driver's or passenger's head in a vehicle.
Example: There is ample space, although a bit more headroom for rear passengers
would be nice.
Exchequer: a royal or national treasury.
Example: The most important post in judging the character of the government is its
finance minister and chancellor of the exchequer.