Even as the Indian government took the first real step towards getting back black money, or undeclared wealth allegedly stashed away by Indians in overseas accounts, by naming three such people in the Supreme Court, what is the actual quantum of such funds being talked about is not clear.
Despite some official White Papers, or government reports, on black money tabled in the past, only unofficial estimates by independent agencies are floating around. The variations are also rather wide.
One figure that is often quoted came from senior BJP leader L.K. Advani, who was India’s deputy prime minister and home minister during the regime of the National Democratic Alliance (NDA) till 2004. Advani, as a key opposition leader, had said in 2011 that some Rs.28 lakh crore (around $466 billion) was stashed away illegally in bank accounts overseas.
He said he was using a study by Global Financial Integrity, a Washington-based non-profit that does research and advocacy on illicit financial flows, for his estimate. Advani also said the names of 782 alleged Indians with illegal overseas accounts – that have not been declared with the Indian government and hence no taxes paid on them – were not being disclosed.
Advani’s own party in 2011 had estimated the black economy at between $500 billion and $1.4 trillion.
In the Government of India’s White Paper presented in parliament in 2012, the total deposits of Indians in all Swiss banks was around $2.1 billion — nowhere even near the lowest estimate of $466 billion.
In fact, there were also reports quoting a so-called report of the Swiss Banking Association in 2006, as per which black money of Indians overseas was placed at $1.46 trillion. But these reports were subsequently denied by Swiss authorities. The Swiss Bankers’ Association said it never published such a report.
It will be worthwhile, however, to revisit the May 2014 report of Global Financial Integrity, which took note of the Prime Minister Narendra Modi government forming a Special Investigative Team (SIT) to probe illicit financial flows.
“Illicit financial outflows are a massive problem for India. GFI research finds that India lost $343.9 billion to illicit outflows from 2002 to 2011,” it said, adding: “India ranks 5th in the world in illicit outflows, and is the poorest country in the top-10 by per-capita GDP.”
Timeline
November 1991 – Swiss magazine Schweizer Illustrierte named former prime minister Rajiv Gandhi among 14 politicians, alleging he had some $2.2 billion in a Swiss bank account in his name.
February 2011 – The BJP-led National Democratic Alliance (NDA) released a booklet, “Indian Black Money Abroad in Secret Banks and Tax Havens”, which contained allegations against Congress president Sonia Gandhi and her late husband Rajiv Gandhi.
June 2011 – Then prime minister Manmohan Singh questioned the calculation behind estimating black money stashed by Indians abroad ($89.16 billion) but said all possible steps were being taken to bring it back.
June 2011 – Appointment of a high-level committee headed by M.C. Joshi (then Central Board of Direct Taxes chairman) to study the generation and curbing of black money.
November 2011 – India made a commitment to G20 that it will remain an active member of the global battle against black money and will soon sign the Convention on Mutual Administrative Assistance in Tax Matters to curb it by sharing information.
November 2013 – Then Gujarat chief minister Narendra Modi promised to bring back black money stashed abroad and called for a law on the subject. In campaign rallies, Modi, the BJP prime ministerial candidate, harped on the theme.
February 2014 – Manmohan Singh said his government shared the opposition’s views on getting back the black money stashed by some Indians in foreign banks and said it would sit with political parties to seek help and see how the black money problem can be dealt with.
March 2014 – Then finance minister P. Chidambaram said he had taken up the issue of black money of Indians stashed abroad.
March 2014 – The Congress election manifesto said it will appoint a special envoy on black money.
April 2014 – Government disclosed to the Supreme Court the names of 26 people who had accounts in banks in Liechtenstein — as revealed to India by German authorities.
April 2014 – The Aam Aadmi Party promised to bring back black money stashed abroad.
April 2014 – The BJP suggests setting up a task force to retrieve black money.
May 2014 – The Narendra Modi government announced the formation of a Special Investigation Team (SIT) on black money, headed by retired justice M.B. Shah.
July 2014 – Finance Minister Arun Jaitley informed parliament that there is a positive response to requests made by India to Swiss banks.
July 2014 – In its first budget, the government said the problem of black money to be fully addressed.
October 2014 – Jaitley said the government won’t hold back any information on black money or names of account holders in tax havens, but the latter will be revealed after “following due procedure”.
October 2014 – The NDA government discloses names of businesspeople, Pradeep Burman and Pankaj Lodhiya, as well as Timblo Private Limited and its directors Radha Satish Timblo, Chetan S.Timblo, Rohan S. Timblo, Anna C. Timblo and Malika R. Timblo who are said to hold bank accounts abroad. (IANS)