Black money was one of the major issues debated during the 15th Lok Sabha elections. Indian black money is deposited in foreign countries mainly in Switzerland Swiss Bank) and in the UK.
What has made this old styled issue a major one during the election, and what are the estimates of the quantum of black money from India parked in the tax havens across the world?Recently, due to international pressure, the Swiss Government agreed to disclose the names of the account holder only if the respective Governments formally asked for it. According to Swiss banking Association report, 2006 details of bank deposits in the territory of Switzerland by nationals of following countries are as below.
The top five countries are India $1456 billion, Russia $470 billion, UK $390 billion, Ukraine @100 billion, China $96 billion.India with $1456 billion or $1.4 trillion has more money is Swiss Banks than rest of the world combined, suggests public loot since 1947. this figure is only of the Swiss Bank, obviously amount will be more once other countries’ account will be added.
Even the amount of $1456 billion is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs. 100000 each. This huge amount has been appropriated from the people of India by exploiting and betraying them. Once this huge amount of black money and property comes back in India, the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, the country will still have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central Government.
Can we bring back this money? It is one of the biggest loots witnessed by mankind – the loot of the Aam Aadmi (Common man) since 1947, by his brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen. Recently, BJP’s Prime Ministerial candidate L.K. Advani has gone on record saying he would make sure black money siphoned from India is brought back to the country. Further he said if the BJP-led National Democratic Alliance gets the people’s mandate they would take up the matter on both legal and executive level and pursue it in every possible manner. The same has been reiterated by the Communist parties.
The issue has some politico-historical tinge. The reason why it has become an issue like it used to be in the elections in the 1970s and 1980s lies some where in the present global slowdown the world in gripped with. With economy in distress, the American authorities forced the Swiss banking major UBS to mend its ways and reveal the name of 300 odd customers parking their money with them. The bank was also fined $780 million for aiding tax evasion. G-20 countries have also threatened sanctions against non-cooperating tax havens. These have triggered most Indian political parties to make the issue of black money into election money, though reactions have ranged from approval to skepticism.
The reserve bank of India (RBI) has also said now that it would deal with the problem by continuously updating its regulations in line with the G-20 guideline on strengthening transparency in cross-border movement of capital. RBI, further has instructed banks to be cautious while continuing relationships with banks located in countries with poor know-your-customer (KYC) standards.Stretching the issue further and making it a big election issue, Gujarat government conducted a “referendum” on whether black money from the country stashed in foreign banks should be brought back and used for uplift of the poor and downtrodden.
Amidst all this, there is movement in the other side also. Spokesperson of the Swiss finance department has been quoted in media reports saying that India can renegotiate the double taxation avoidance treaty between the two countries, and then ask for cooperation on tax evasion issues. But this can take a very long time to fructify.The big question which remains though is : Are all these calls mere political rhetoric as always, or will some action follow the word? Probably these will remain just words, for such attempts can expose many politicians and political parties in the public. However, if Advani or other politicians are really serious about these, it seems a welcome move. It will do phenomenally good for the country. India will be in the top five leagues if all the ill-gotten money is brought back. It will change the Indian scenario. Here the big question is “Can we bring back black money?” still remains unanswered..