There are several straws in the wind indicating that black money held by Indians abroad is coming back covertly. Possibly in torrents. There are equally strong indications that the government wants to encourage it with a wink and a nod, but is afraid to openly say so by offering a bold amnesty scheme that can be sold in the open.

Here are the signals, starting with the latest one first:

#1: The Rs 50,000 currency note. Earlier this week, Finance Minister Arun Jaitley launched a Kisan Vikas Patra (KVP) savings certificate with a tenure of eight years and four months to double your money. The KVP has an inherent yield of around 8.5 percent, but its key feature is not its annualised return, but its relative anonymity. After the initial know your customer (KYC) documentation, KVPs can be transferred to anyone and repurchased on maturity at any post office. No PAN details are required, which means the taxman will not have access to any information from the post offices where these are going to be sold. Even if you launder money and declare an income from KVPs eight years and four months later, the taxman can’t catch you, since there is a law limiting how far back you can go to reopen tax assessments.

The KVPs, which come in denominations going upto Rs 50,000, are officially intended as a savings avenue for rural areas, as their name suggests, but they will effectively become instruments for the storing and transfer of undeclared cash. The humble kisan can use other post office instruments such as monthly savings schemes and national savings certificates for his savings. What Jaitley has done is create a new Rs 50,000 note for people other than the kisan. Neat.

#2: The anonymous investor. In October, outstanding investments in participatory notes (P-notes) hit a seven-year high, reaching a level of Rs 2,65,675 crore. P-notes are derivative products used by investors who want to invest indirectly in Indian securities, and where the entire transaction happens offshore. It is only the P-note issuer, an intermediary (usually a bank or FII), which buys and sells the underlying security in the Indian markets. It is one of the worst-kept secrets that P-notes are used mostly by Indians who want to buy and sell in India without revealing their identities. A rise in P-note usage is thus a red light saying more black money is coming in.

#3: Let’s get real. A flurry of action, in policy and funding options, has happened in real estate. Everyone knows that real estate in India is the biggest carrier of black money. Everyone also knows that at current prices, real estate is practically unaffordable to 99 percent of Indians. So why would anyone want to invest humongous amounts of money in a real estate fund? In today’s newspapers (21 November), formerCitibank CEO Vikram Pandit is said to have teamed up with JM Financial for a Rs 900 crore realty fund.Motilal Oswal Realty has raised Rs 440 crore for another fund. Every week someone or the other is planning investments in real estate.

Last month, the government eased foreign investment rules for real estate and housing, enabling even more foreign money to come into an already overheated and overpriced sector. The UPA opened up the most difficult sector – FDI in multi-brand retail – and risked its government’s stability. But it still went ahead. One reason: if the Wal-Marts had come in, it would have sent urban commercial real estate soaring.

#4: Striking gold. Five days before the new Modi government took over, the Reserve Bank of India inexplicably liberalised gold import rules, allowing star trading houses – big importers and exporters – to import gold under the 80:20 scheme. This means for every 100 units of gold imported, they had to re-export 20 units in some form (jewellery, etc). Is it any surprise that today’s Economic Times reports that just six trading houses imported 40 percent of all gold imported in September? If anyone is interested, the line to pursue is who bought their imported gold.

Says the report, quoting a government official: “The six firms had imported 7.57 tonnes of gold in April, which shot up to 47.26 tonnes in September. The 80:20 scheme is being misused by these exporting houses, which was raised in a meeting called by the department of economic affairs.” What was the tearing hurry to liberalise during a period of government transition? Before 21 May, only banks and some government-owned trading houses could import gold under this scheme.

After real estate, gold is the biggest repository of domestic black money for it is easily fungible and can be bought and sold anonymously in a gold-crazed country.

Add it all up and see where it leads: all avenues for parking and tapping black money are being slowly opened up.

Logically, a government keen on using black money for productive purposes should be offering an amnesty scheme and making it all legit. But in a political climate where the BJP made such a fuss about bringing back black money stashed abroad if it came to power, it is shrinking from offering a plain-and-simple amnesty scheme for fear of being labelled as black-money friendly. The BJP is clearly worried of the political backlash.

In India, the road to pragmatic policy is paved with the tar of hypocrisy.