BRP Bhaskar
Gulf Today
There was a spurt in money stashed by Indians in secret accounts in Switzerland last year. The last time a big jump occurred was in 2006. The gap of five years is significant.
It is not unreasonable to draw a link between the swelling of Swiss bank
deposits and national and state elections in India, normally held at
intervals of five years. The fall in deposits since 2006 can then be
explained in terms of repatriation of funds to meet the expenses of the
elections of the last five years, including the parliamentary poll of
2009. And the recent spurt can be seen as part of the preparations for
the upcoming elections, including the Lok Sabha poll due in 2014.
The Association for Democratic Rights, a non-governmental organisation monitoring election malpractices, estimated that campaign expenses during a five-year period could be anywhere between Rs350 billion and Rs810 billion. It reckoned that one-fourth of the estimated Rs100 billion spent during the 2009 Lok Sabha poll was black money.
Reacting to the Swiss disclosure, Finance Minister Pranab Mukherjee said all the money parked abroad by Indians was not black money. Businessmen and business houses could have legitimate deposits abroad.
If the public tends to view all deposits in foreign banks with suspicion, the blame rests entirely with the government, which has been unwilling to gather full facts and publish them. A month ago, the government placed before Parliament a white paper on black money. The voluminous document did not name black money holders or reveal the extent of their holdings. Overlooking the political connection, it blamed foreign investment, corporate activity and the stock markets for generating black money.
India could not get information on tax evasion from the 77 countries with which it had signed double taxation avoidance agreements since the pacts did not provide for exchange of information on tax evasion. New agreements have been negotiated with 37 countries in the last three years. However, no information obtained from them on illegal wealth of Indians has come into the public domain so far.
A few years ago Germany made available information about the bank accounts of 15 Indians and three foreign-registered trusts with Indian connections in the tax haven of Liechtenstein, contained in stolen database which it had bought paying $7.4 million. The government said it was investigating the matter but there was no action against any of the account holders.
Speaking at the first Interpol Global Programme on Anti-Corruption and Asset Recovery in New Delhi in February this year, Central Bureau of Investigation director AP Singh put the illegal money held abroad by Indians at $500 billion. He said some recent CBI investigations had revealed that money reached Switzerland and other tax havens through Singapore and Mauritius.
In the white paper the government talked of setting up fast-track courts and awarding deterrent punishment to check black money. However, it has not come up with a concrete plan in this regard. It is widely believed that the government is reluctant to act because powerful political, bureaucratic and business elements are involved.
Yoga guru Ramdev, who recently fasted in New Delhi, along with anti-corruption campaigner Anna Hazare, has demanded steps to recover black money hoarded abroad. Several national and regional parties have endorsed his demand. However, few regard him and his backers as credible agents of change.
Gulf Today
There was a spurt in money stashed by Indians in secret accounts in Switzerland last year. The last time a big jump occurred was in 2006. The gap of five years is significant.
According to Swiss bank data, Indian deposits increased by one million
Swiss francs in 2006 to touch a peak of 6.5 billion francs (about Rs400
billion). Thereafter the deposits started falling and were as low as
about Rs93 billion at the end of 2010. Last year fresh inflow of funds
raised the total to Rs127 billion.
The Association for Democratic Rights, a non-governmental organisation monitoring election malpractices, estimated that campaign expenses during a five-year period could be anywhere between Rs350 billion and Rs810 billion. It reckoned that one-fourth of the estimated Rs100 billion spent during the 2009 Lok Sabha poll was black money.
Reacting to the Swiss disclosure, Finance Minister Pranab Mukherjee said all the money parked abroad by Indians was not black money. Businessmen and business houses could have legitimate deposits abroad.
If the public tends to view all deposits in foreign banks with suspicion, the blame rests entirely with the government, which has been unwilling to gather full facts and publish them. A month ago, the government placed before Parliament a white paper on black money. The voluminous document did not name black money holders or reveal the extent of their holdings. Overlooking the political connection, it blamed foreign investment, corporate activity and the stock markets for generating black money.
India could not get information on tax evasion from the 77 countries with which it had signed double taxation avoidance agreements since the pacts did not provide for exchange of information on tax evasion. New agreements have been negotiated with 37 countries in the last three years. However, no information obtained from them on illegal wealth of Indians has come into the public domain so far.
A few years ago Germany made available information about the bank accounts of 15 Indians and three foreign-registered trusts with Indian connections in the tax haven of Liechtenstein, contained in stolen database which it had bought paying $7.4 million. The government said it was investigating the matter but there was no action against any of the account holders.
Speaking at the first Interpol Global Programme on Anti-Corruption and Asset Recovery in New Delhi in February this year, Central Bureau of Investigation director AP Singh put the illegal money held abroad by Indians at $500 billion. He said some recent CBI investigations had revealed that money reached Switzerland and other tax havens through Singapore and Mauritius.
In the white paper the government talked of setting up fast-track courts and awarding deterrent punishment to check black money. However, it has not come up with a concrete plan in this regard. It is widely believed that the government is reluctant to act because powerful political, bureaucratic and business elements are involved.
Yoga guru Ramdev, who recently fasted in New Delhi, along with anti-corruption campaigner Anna Hazare, has demanded steps to recover black money hoarded abroad. Several national and regional parties have endorsed his demand. However, few regard him and his backers as credible agents of change.
The Election Commission, a statutory body with wide powers to ensure
free and fair polls, has taken several steps since 2010 to check the use
of black money in campaigns. Last year it seized more than Rs1.2
billion of unaccounted money in election-time raids. When five states
went to the polls early this year, it deployed more than 200 income tax
officials to check the flow of black money. They hauled in Rs470 million
in cash and large quantities of liquor and drugs.
The
Election Commission has the power to disqualify a candidate found
guilty of electoral malpractices. However, in the absence of political
will to unmask the evildoers, getting a guilty verdict is no easy task.--Gulf Today, Sharjah, June 19, 2012.
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