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Govt must plug this black hole

With the Supreme Court directing the government to bring back black money stashed in foreign banks and also find its sources, the Centre finds itself in yet another complex situation. Pankaj Vohra writes.

india Updated: Jul 23, 2011 19:53 IST
Pankaj Vohra

With the Supreme Court directing the government to bring back black money stashed in foreign banks and also find its sources, the Centre finds itself in yet another complex situation. The government has so far pleaded helplessness in dealing with the issue in the absence of a legal framework but its detractors are insisting that it was lack of will which prevented the sensational disclosures.

The apex court's observations came close on the heels of a press conference convened by Union finance minister Pranab Mukherjee where he said that the names of the defaulters in relation to information provided to the authorities by the German government could not be disclosed. He also said that the Double Taxation Avoidance Agreement and the Exchange of Taxation Information Agreement were two instruments under which the Centre can obtain information and the government has already amended pacts with 23 countries.

Though the finance minister held his press conference at the behest of the prime minister to explain the government's standpoint, there are many who are also reading a deeper meaning into his statement given the power struggle within the Congress party. Knowing that Pranabda rarely makes a statement without taking a considered view, it is

being said that his proclamation that he knew the names (but could not disclose them) was meant to put some of his colleagues and detractors in Parliament and outside on notice.

It is common knowledge that the government has the names and had even informed the Supreme Court about the existence of such information in an affidavit. But for Pranabda to state it when he could have skirted the issue is being interpreted as a warning of sorts. There is already wide speculation over who figures in the list of those having foreign bank accounts. These names include those associated with the present regime and the previous one. And since Switzerland, where most of the black money is stashed, is not going to disclose the information, 'the names' may find their way into the public domain, though without proper authentication. If that happens, the government will find itself on the backfoot.

A fresh controversy has already erupted so far as the Bofors kickbacks are concerned and the Income Tax Tribunal's order has confirmed that there had been a pay-off. The government finds itself in a defensive position. The Quattrocchi angle will once again surface as the government refuses to learn from past mistakes that in order to end speculation, you have to get to the bottom of things. The reality is that in India with its culture and past, corpses (issues in this case) can only be cremated and not buried. If they are buried, they will

be exhumed from time to time to haunt those connected with the controversy.

The credibility of the government, thanks to the numerous scams, is so low that even if half-truths are spread, people tend to believe them. There is no attempt to address issues head-on and many matters that could have been sorted out to the satisfaction of all are being allowed to linger.

The black money issue has assumed serious proportions because people expect that the government will take steps to get it back and order action against those responsible. It is also being argued that in the case of some of the accounts, the government must move Swiss courts with evidence that the money parked in banks there was being used for terrorism purposes or other illegal activities. Under such circumstances, the confidentiality rules can be relaxed.

At the ground level, since the government has the names, raids must be conducted at the premises of the suspects based on information obtained from various sources, including the German government. Their businesses should be sealed and they must be held accountable. Otherwise, our democracy will be stuck at the crossroads. Between us.