Two numbers to make a difference - go get them Nilekani

1) UID
2) GST

Why? Because these two numbers will make most things traceable. It will take a decade before the infrastructure is up, and the law able to track a transaction through bank accounts. But it will happen because:

1) GST will reduce the attractiveness of cash in transactions for legitimate businesses of any size. A 12% GST for a cash business could kill all profit if input credit is not taken.
2) GST will therefore dry up the source of black money in business.
3) Anyone want to guess why there is such a clamour to leave real estate out of GST? Because real estate is where politics meets the economy. Even if it is left out there will be a problem for politicians and their familiars, because where will the black money arise? Land speculation does not create money; only banking transactions do.

Add the UID and it is simple to trace money flows to companies, and to and from the accounts of their authorized signatories, directors, officers etc., and because it is already enshrined under Indian law, that of their relatives.

Straightforward software could reconcile the income and expenses of each of these individuals' tax returns to the gross money flow data in their bank accounts. If all sources and uses match the what the taxpayer has provided it is a full return. If they do not then the state has the data to compute a tax return for the missing amounts and send a bill.

Ever wondered why the same man is in charge of the system for both?

I found Mr. Nilekani's book rather a rah rah India bore, but that and his sterling track record got him this job. I hope his success at the numbers game beats his success at Infosys. Now that will be a rah rah India story.