How Modi allowed Black Money to Escape Abroad before Demonetization

Before demonetization, Modi Sarkar actually changed the rules to allow black money to be taken out of India and parked abroad. Well-planned structured money laundering was enabled by Modi Sarkar before banning 500 and 1000 denomination currencies.

After enabling enormous amounts to be transfered overseas, now Modi is playing anti corruption, anti counterfeit and anti black money drama.

Details of Modi's actions over the last two years:

1) One week after Modi's taking office as prime minister on 26 May 2014, RBI Increased the LRS (Liberalized Remittance Scheme) slab to USD 125,000, on Jun 03, 2014. Read this RBI circular: http://bit.ly/2g1zUZN

2) Exactly one year after Modi became PM, LRS slab was further increased to 250,000 USD on 26 May 2015. Read this RBI circular: http://bit.ly/2fLgMQL

{How and by whom are funds transferred outside India? Read details here: http://bit.ly/2gpRJqr
 
Why are funds generally transferred abroad under Liberalized Remittence Scheme (LRS)? Read http://bit.ly/2fnC7PA, http://bit.ly/2fC5O2l and also http://bit.ly/2faB73D
 
Lots more information, especially specific notifications, can be found at RBI's website: http://bit.ly/2fnESjV }

LRS limit of USD 250,000 means an individual from India can transfer upto two crore rupee per year to their overseas account. Due to this increase, there was a sudden spurt in foreign remittances since June 2015. Approximately 4.6 billion USD (30,000 Crore rupees) were transferred from India in 11 months (June 2015 to May 2016) -- almost 300% higher than historical average remittance. There is no clear explanation from RBI for this sudden surge. Read this article in Economic Times dated 17th May 2016: http://bit.ly/1ThbZT0

After enabling enormous amounts to be transfered overseas, now Modi is playing anti corruption, anti counterfeit and anti black money drama.

EXPLANATORY NOTES:

1) True, not all money remitted abroad by LRS is "black money". A lot of it is legit.

2) However, "black money" is not necessarily money that evades IT. For instance, money laundering is the practice of bringing black money or blood money back into the system by paying IT. So, the definition of black money must be widened to include laundered money that has been reintroduced into the system, and travels in regular banking channels.

3) Not all remittances by LRS are for the purpose that is officially stated. A lot of the remittances during the period under review appear to be fleeing the Indian economy. Hence the abnormally high (300% of normal) remittances. That, in any case, is our argument.

Thank you Vineet Malik for your basic research and valuable inputs.

ISSUED IN PUBLIC INTEREST BY
Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com