Rich Agricultural Land Owners
In India, agricultural income is tax free but this channel is often misused to launder black money costing the exchequer in billions.
While it is true that a large number of farmers in India are poor, there exist few very rich land owners that masquerade as poor farmers.
They, even if they are rich, enjoy all kinds of power and fertilizer subsidies, minimum support prices set up by the government to protect
poor farmers, loan waivers and most of all- tax free income. Rich farmers and such corporations are very influential in the government and
bureaucracy and lobby against legislations that would pin them down. The system is hoodwinked by such farmers by buying cheap and uncultivable
land. They would declare it to be cultivable land and thus all of their incomes become tax exempted. With the announcement of demonetization
such large piles of illegally hoarded cash would become useless and poor farmers would benefit.
Another common practice is to buy subsidised agricultural land and convert it into residential land over a period with the help of people in
influential positions or corrupt politician/bureaucrats. In this way, these affluent fake farmers purchase subsidised land at very low cost and
sale them at hefty profits as residential land after conversion. This directly impacts poor farmers as they are denied their right to low cost
subsidised agricultural land and also it is loss of natural resources as fertile agricultural land is declared residential fictitiously.
The profits earned on these agricultural land deals are kept hidden from the system and become a statistics in black money figures. But now,
due to strict action on illegal land dealings, ‘benami’ transactions, ill wealth and action on corrupt bureaucrats by the Modi government have
plugged the loopholes in the system. The fake farmers are looking for ways to dispose off their ill gotten wealth before the taxman can initiate
criminal proceedings against them.