By Anupama Chakraborty The Times Of India The rules of black cash and how India’s Rs. 500-crores in black money will be distributed among all the state governments in the country are yet to be defined, with the Cabinet deciding on December 1 to distribute the funds at a targeted rate of 4% per year over the next three years.
However, the rules have already been decided by the Cabinet.
According to a government order, black money is money that is “not held in any denomination” and has not been converted into any legal tender or deposited in banks, which can then be used for payments.
Black money in India, according to the government, is “less than one per cent of the total currency in circulation”.
Black money is cash or other property that is not legal tender and has been illegally taken out of India.
The government said that in the next two years, it will distribute a total of Rs. 9,000 crore in Rs. 100 notes to all the states in the Union Territory of Andhra Pradesh, the state where the Prime Minister Narendra Modi was born.
The government said in its order that it will provide Rs. 4,000 crores to the states and that it has provided an extra Rs. 3,000 to the central government for the process of setting up the State Bank of India to oversee the distribution of the funds.
In a nod to the Supreme Court ruling in favour of the government and the Centre, the Centre has also agreed to share the money with the states.
The money will go towards establishing the State Reserve Bank and the Reserve Bank of the state, the Finance Ministry said in a statement on Friday.
The Centre has been seeking funds to set up the Reserve Banks for the last two years.
In its order, the government said the government will distribute Rs. 1,000,000 per year to the Centre from the existing Reserve Bank Reserve Fund, with an additional Rs. 30,000.
The Supreme Court judgement in favour the Centre in December last year had directed the Centre to set the Reserve Fund as the reserve for the State government to ensure that the funds were distributed to the people of the Union Territories in a timely manner.