How much black money have Indians stashed abroad? Govt has no estimate
The government said on Tuesday it had no estimation of the black money that Indians have stashed in foreign countries.india Updated: May 03, 2016 19:43 IST
The government said on Tuesday it had no estimation of the black money that Indians have stashed in foreign countries.
Prime Minister Narendra Modi’s government has said it was moving towards repatriation of hundreds of billions of dollars in slush funds or black money stashed abroad, as part of a wider clampdown on corruption that Modi promised during his 2014 election campaign.
But opposition parties have criticised the government for alleged inaction on the issue, as the government came out with a one-time four-month compliance window for domestic black money holders to come clean by paying tax and a penalty of 45%.
“Determination of black money sent to foreign countries by Indian persons is subject matter of investigation and other follow-up actions by relevant law enforcement agencies, including Income tax department, enforcement directorate, CBI etc, which is on-going.
“However, details regarding the amount of money involved in such cases are not maintained centrally,” minister of state for finance Jayant Sinha said in a written reply to the Rajya Sabha.
A recent expose that over 500 Indians used a law firm in Panama to set up offshore entities in tax havens across the world have brought the issue once again under the spotlight.
A Special Investigation Team (SIT) set up by the Supreme Court to trace black money stashed abroad had recently asked three government agencies to prepare a report on the allegations.
Black money arises mainly from incomes not disclosed to the government usually to avoid taxation, and, sometimes, because of its criminal links.
About a third of India’s black money transactions are believed to be in real estate, followed by manufacturing and shopping for gold and consumer goods.
Asked whether Indian share in black money stashed in tax havens across the world is at $152-181 billion —the recent estimate by economists from the Bank of Italy — Sinha said there seemed to be no empirical evidence to suggest that the figures necessarily represent Indian’s share in black money in tax havens.
These economists have reportedly analysed data from the Internation Monetary Fund and the Bank of International Settlement (BIS) and applied certain assumptions to arrive at the estimation, he added.
The minister pointed out that by applying another set of assumptions, the same economists have reportedly estimated Indian share in black assets at $4-5 billion.
“In the context of these estimation, they have reportedly put the caveat that these estimations have to be considered with great care and in no way can represent firm data,” Sinha said.