Clearly stung by rising public outrage over corruption, the UPA government is set to unveil white paper on black money outlining the broad contours of policies to tackle the scourge and the measures that it plans to take.
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 in undisclosed accounts in overseas bank accounts.
"I propose to bring a white paper on black money in this session of Parliament," finance minister Pranab Mukherjee said in his budget speech.
The steps also include creating an appropriate legislative framework, setting up institutions for dealing with illicit funds, developing systems for implementation and imparting skills to manpower for effective action. Grey anatomy - Nothing's black and white
A multi-disciplinary committee involving think-tanks-National Institute of Public Finance and Policy (NIPFP), National Institute of Financial Management (NIFM) and the National Council for Applied Economic Research (NCAER) - 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 (about Rs. 22.5 lakh crore) to $1.4 trillion (about Rs. 63 lakh crore).
A recent study by Global Financial Integrity, Washington-based research group, has estimated the present value of illicit money outflow at about $462 billion (about Rs. 20,79, 000 crore).
A panel headed by the Central Board of Direct Taxes (CBDT) chairman is learnt to have finalised a report recommending a slew of measures that include a 10-year rigorous prison term for government officials found to be taking bribes and a host of rules that will make it obligatory for big spenders to voluntarily report high value transactions.
The committee, set up in June last year, has recommended a host of ways to strengthen laws to curb black money.
Also, to tighten its noose on overseas transactions said to be aiding money laundering, the government may mandate that all overseas transactions should be reported to the Income Tax Department.
This measure is broadly modelled on the lines of what was as in the case of domestic transactions on the lines of the USA's Patriot Act.
The Patriot Act was adopted in response to the September 11, 2001 terrorist attacks aimed to strengthen US measures to prevent, detect, and prosecute international money laundering and financing of terrorist activities in the country.