How India's move to curb black money can also fight child trafficking

Sunday 4 December 2016

India’s “surgical strike on black money” has shaken commercial establishments across India, both small and large. More significantly, the overnight ban on 500 and 1000 Rupee notes has affected all enterprises where corruption is an everyday affair. The move, announced by Prime Minister Narendra Modi is designed to attack those who hoard money, known as “black money”, which escapes the ambit of taxation and verification. By forcing people to visit banks to exchange old notes for new ones, and deposit large cash reserves in the bank, the government aims to bring this money into the mainstream economy.

According to Nobel Laureate Kailash Satyarthi, it will also help curb trafficking and child slavery

Trafficking and child slavery are among the biggest sources of black money, simply due to the high margins of using children as labour, as well as selling children into slavery. The amounts generated are often kept in cash or assets like gold, instead of becoming a part of the country’s GDP as these two businesses are illegal.  India is home to 40% of the world’s 45 million slaves (2016 Global Slavery Index: Walk Free Foundation).

Year on year, thousands of children are transported from poor rural areas to cities by gangs, who sell them into bonded labour or to employers. Huge demand for cheap, abundant labour results in high profits for child labour. These children work as domestic workers or labourers in brick kilns, roadside eateries, small textile and embroidery workshops, and other labour-intensive businesses. Women and girls are bought by brothels.

The ecosystem of black money

Globally, buying and selling of children is a billion dollar affair. Black money arises from two main sources – undertaking illegitimate activities and tax evasion (or avoidance). Both are common in the child trafficking business, which due to its illegality can never file income tax returns. Income taxes are also problematic for another reason – how does a child that is legally not allowed to earn an income, justify wages? The paper trail would instantly identify anyone who hires child labour as guilty.

Fearing this legal action, shopkeepers employing child labour also avoid taxation on the income they generate – as they may need to reveal the staff they employ, as it includes underage children. To maintain secrecy, they assist an eco-system of hawala transactions, investing in jewellery and bullion, and even hiding caches of money underground.

All of this has been shaken by the government’s one swift move. Unusually large sums, which are not justified, are brought to the attention of the Reserve Bank of India and tax authorities.

Conclusion
This money can go towards many beneficial projects that are in line with the government's agenda of 'nation building.' These include long-term program of skill building, fighting for girl child rights and education, cleanliness, and ecosystem conservation. There are also immediate concerns like nutrition, relief and rehabilitation in terms of calamity, and medical care to the needy.  These programs all entail the involvement not only of government ministries and relevant bodies but also civil society and activists. Hence, the fight against black money is something that every Indian must unite for. 

The government has respected its promised mandate to fight corruption from the political and business class. It is important to support the government, as concerned citizens, as volunteers of civil society, and as proud taxpayers. Support an NGO like Save the Children, known for transparency in multiple projects for child rights. You will not only receive donation tax rebate, but the satisfaction of having joined a movement for good.