The famed wall of secrecy around Swiss banks has crumbled, with Switzerland signing an international agreement on fighting tax evasion - a move that will allow India and other countries access to information on concealed illicit money.
Switzerland agreed to exchange information and provide assistance in tax matters after it signed the Organisation for Economic Cooperation and Development's (OECD) Multilateral Convention on Mutual Administrative Assistance in Tax Matters on Tuesday. India is among the 58 signatories of the convention.
Three years ago, India and Switzerland signed a bilateral agreement that would give authorities in India access to Indians holding Swiss bank accounts. Under this, India needed to only provide a name, not even an account number, to get the details.
There are no official estimates of India's black economy. Global Financial Integrity, a Washington-based think-tank, has estimated that Indians salted away $462 billion (about Rs. 28 lakh crore in current exchange rates) in overseas tax havens between 1948-2008.
In 2011, the government commissioned a joint study by three think-tanks to estimate Indian entities' unaccounted wealth both at home and abroad. The study's findings have not yet been made public, but is speculated to have pegged the size of black economy at about 30% of India's gross domestic product) or about Rs. 35 lakh crore.
Switzerland has been under intense global pressure to cooperate with overseas authorities to share information about accounts in its banks, often favoured by tax evaders.
(With inputs from agencies)