Yesterday was a historic day in Karnataka when Prime Minister Mr Modi visited the sacred town of Dharmasthala and offered his prayers to Lord Manjunatheshwara.

The humility with which Mr Modi appeared not only in the temple but also before Mr Veerendra Hegde the Dharmadhikari of the temple was some thing to be noted particularly in contrast to other politicians.

During the visit, Mr Modi also officially launched a program in which 12 lakh Rupay Debit cards were distributed to the members of a self help group promoted by the Dharmasthala authorities under Mr Veerendra Hegde so that they can be used for transactions in lieu of cash transactions.

It was a demonstration of how Digital payments can be adopted at small towns where there is a lower level of technical knowledge and also how institutions like temples which have a huge influence on the population could participate in such programs.

Dharmasthala is unique in this regard that besides being a well known religious place where Lord Shiva is worshipped in the name of Manjunatha, it is also known for “Dharma” and “Truthfulness”. Mr Veerendra Hegde is revered as a person who can sit in adjudication of problems and there is a belief that no one dares speak untruth before the Lord. The Dewasthanam is also known for its umpteen social service activities including education and other social upliftment programs.

While speaking on the occassion, Mr Modi spoke of the need for a “Cash Less Economy” to eliminate Black money in the country.

The importance of elimination of “Black Money” meaning “Money Not accounted for Taxes” is a key ingredient of Modi’s economic policy which should generate more revenue for the Government and provide funds for development which should create more jobs. This policy is in contrast to the Congress policy which believes that it can dole out money from the Government coffers so that the population can wine and dine without working and contributing to the wealth of the nation.

While speaking, Mr Modi once used the term “Digital Cash” to refer to the plastic money and the need to encourage its use. It is to be noted that in this context, Mr Modi was referring to money in the Banking system which is not withdrawn in the form of rupee notes but held as balance in the Rupay Cards and used as such for payments for other services and products which the card holder may need. I am sure that the shops and establishments in and around Dharamasthala will start accepting Rupay cards for payment for goods and services and reduce the need for rupee notes.

This is “Digitization of our White money lying in the Bank accounts” and this is what is to be encouraged.

Let there be no confusion between Digitized White Money and Bitcoin

I would however warn that clever manipulators of news should not use this opportunity to start saying that “Modi prefers Digital Cash for Digital India” and hence “Mr Modi is in favour of Bitcoins” and “Crypto Coins” which are a pure form of “Digital Cash”.

I will not be surprised if the same argument is placed before Mr Modi that legalization of Bitcoin is in furtherance to his own push for Digital India.

I pray that Lord Manjunatha may provide the clarity of vision to Mr Modi that after demoneitzation and GST, the next big challenge is how to ensure that “Black Money” does not get accumulated in the form of “Digital Wealth” including money in Rupay Cards.

It is for this reason that linking of Aadhar to Bank accounts is being suggested by the Government which is being opposed by many including perhaps many in the Judiciary.

Though there are issues in fraudulent issue of Aadhar cards which needs to be corrected, once the money becomes accountable in some Aadhaar card, investigators can work on establishing whether the card holder is genuine or not. If it is found that the card holder has given false particulars for Aadhaar enrolment, action can be initiated for cancelling the Aadhaar card and re-enrollment. In the meantime the money in the Aadhaar linked card could get frozen.

If this creates problems for some genuine poor people, solution is in giving them alternate Aadhaar IDs and not diluting the need to link Aadhaar number to Bank account.

However, since Aadhaar number is already linked to PAN number, there should be no need for those who have already linked PAN numbers with Bank accounts to also link Aaadhaar numbers separately. Similarly, it should be sufficient to link either a Bank account or a PAN number to the Mobile numbers instead of Aadhaar numbers so that the risk of sharing of biometric with the Chinese controlled Telecom sector is avoided.

I hope the honourable Supreme Court appreciates the need for proper KYC for Mobile numbers and hopefully they will not do anything that allows terrorists,criminals and black money hoarders to run a parallel economy with fake IDs.

Once the “Digital Wealth” in the form of Rupay Cards is properly linked to an identified individual, black money cannot be converted into Rupay Card balances as it may happen over time.

If this is not done, Black money hoarders are likely to purchase Rupay balances and pay out cash while holding the cash themselves in lieu of note bundles.

In future raids by Income Tax authorities therefore, it would not be surprising that we may find hundreds of Rupay cards in the possession of the black money hoarders  having balances running to thousands of rupees. A proper system to secure against misuse of this facility is required.

But identifying black money held in Rupay cards and Digital accounts in Banks in India is within the investigative capabilities of authorities. At the time of last demonetization, many people used JanDhan accounts of their servants and employees and deposited their black money into Banks and later withdrew them in new currency. Government is trying to analyze such transactions and hopefully over a period of time find some black money in these transactions. If Rupay cards are misused, similar investigation would reveal them in due course.

The Future Battle for Black Money is with Bitcoins

The future however is a battle for identifying black money which have been and will be converted into “Crypto Currencies” like Bitcoin. The support that Bitcoin receives world over is because the wealth in Bitcoin cannot be traced to an individual and hence escapes taxes and helps in their use for illegal activities. The premium it enjoys is soley built because of this use of Bitcoin for criminal purposes and not because of any inherent

If therefore Mr Modi does not ban Bitcoins and all other Private Crypto Currencies, Black Money hoarders will convert their black wealth to Bitcoins and Government will lose track. The Finance Ministry under Mr Jaitely is yet to recognize this risk and is happy in “Observing” the Bitcoin and Crypto Currency usage while the industry is exploiting the gullible public and luring them to invest their hard earned money in Bitcoins. Vested interests are developing and as they strengthen,  they will oppose any attempt to ban Bitcoins in the future.

There are others who are trying to fool every body that “Block Chain Technology” is great and it needs to be adopted in all Banking transactions including issue of Currency and Bitcoin is one such great innovation. Some in the Government might agree with the argument and try to encourage Bitcoin without understanding the dangers.

I wish Mr Modi will get the revelation in Dharmasthala that Bitcoin is the biggest Black Money threat to India after demonetization and needs to be killed.

Naavi

 

 

 

 

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