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Pranab to address black money concerns

Under attack for inaction over black money allegedly stashed away in secret bank accounts in overseas tax havens, finance minister Pranab Mukherjee is likely to make a statement on how the government plans to tackle the issue, in his budget speech for 2011-12. Gaurav Choudhury reports.

business Updated: Feb 16, 2011 02:24 IST
Gaurav Choudhury

Under attack for inaction over black money allegedly stashed away in secret bank accounts in overseas tax havens, finance minister Pranab Mukherjee is likely to make a statement on how the government plans to tackle the issue, in his budget speech for 2011-12.

All eyes would be on whether Mukherjee announces an amnesty scheme for offenders who disclose such wealth.

Mukherjee has appointed a group to recommend steps on a tax amnesty scheme.

The last such offer—Voluntary Disclosure of Income Scheme (VDIS) — was introduced in the 1997-98 budget.

The government action plan largely revolves around an array of measures, including amended tax treaties with foreign countries, to stem the illicit flow of money to undisclosed accounts in overseas banks.

The steps also include creating an appropriate legislative framework, setting up institutions for dealing with such funds, developing systems for implementing these laws and imparting skills to the staff for effective action.

A multi-disciplinary committee involving think-tanks — National Institute of Public Finance and Policy, National Institute of Financial Management and the National Council for Applied Economic Research — has been constituted to estimate the quantum of illicit funds generated by Indian citizens.

The interim recommendations of the BJP Task Force have estimated the amount of black money to be between $500 billion and $1.4 trillion (about Rs 22.5 to R63 lakh crore).

Washington-based research group Global Financial Integrity has estimated the present value of illicit money outflow from India at about $462 billion (about Rs 20.8 lakh crore.)