The government is likely to reveal a new estimate of India’s unaccounted “black money” in the Parliament, which will reconvene next Monday after a four-week recess.
The new estimates, the first since 1985, have been compiled at the government’s behest by three think-tanks — the National Council for Applied Economic Research (NCAER), National Institute of Public Finance and Policy (NIPFP), and National Institute of Financial Management (NIFM).
According to this report, which was submitted to Prime Minister Narendra Modi and finance minister Arun Jaitley recently, the size of the shadow economy is about 25-30% of India’s GDP, sources told HT.
Estimates of black money in India fluctuate wildly.
The BJP, in a 2011 report, had estimated India’s black economy to be worth around $500 billion to $1.4 trillion (Rs 27.5 lakh crore to Rs 74 lakh crore), while US think-tank Global Financial Integrity had said estimated that India had lost $123 billion (Rs 6.76 lakh crore) in “black money” between 2001 and 2010.
According to former CBI director AP Singh, around $500 billion (about Rs 31.4 lakh crore) is stashed away in tax havens by Indians.
A 2010 World Bank report puts India’s shadow economy at close to one-fifth of economic output.
This difficulty in measurement is because black money is generated through a raft of activities for the purposes of tax evasion, crime and corruption.
Days after assuming office, the Narendra Modi-led government ordered setting up of a Special Investigation Team to trace black money stashed abroad; its mandate was later expanded to include the domestic parallel economy.
Last month, the Centre introduced a bill to combat black money in offshore locations, with provisions to penalise and prosecute those who do not declare their stashed cash and assets.
Sources said the government will also table a comprehensive new Benami Transactions (Prohibition) Bill in the current session of Parliament. In October, the government handed over to the Supreme Court a list of 628 entities whose names feature in a list of HSBC account holders Geneva, which France had handed over to India in 2011.