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No ‘credible estimate’ of black money available: Parliamentary panel

The parliamentary panel on finance of the 16th Lok Sabha, in its report submitted to the Lower House on Monday, has said it is difficult to provide a “credible estimate” of the black money stashed away overseas by Indians

india Updated: Jun 24, 2019 22:59 IST
HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
Black money,Parliament panel,India news
Image for representation(File photo)

The parliamentary panel on finance of the 16th Lok Sabha, in its report submitted to the Lower House on Monday, has said it is difficult to provide a “credible estimate” of the black money stashed away overseas by Indians, and suggested that it could be anywhere between $3.6 billion to $490 billion between 1980 and 2010.

This massive range in the panel’s report is because three recent studies – by the National Institute of Public Finance and Policy (NIPFP), the National Council for Applied Economic Research (NCAER), and the National Institute of Financial Management (NIFM) – have provided widely varying results.

HT had first reported the findings of the three studies on February 22.

The reports also said the black money estimates could well be the tip of the proverbial iceberg because the larger part of the unaccounted wealth is held within the country.

The panel, however, asked the government to make more efforts with “greater vigour” to unearth black money in and outside the country.

“The unaccounted income and wealth inside and outside the country do not appear amenable to credible estimation in the context of India,” the Standing Committee on Finance (2018-19) said.

The three studies were commissioned by the previous United Progressive Alliance (UPA) government to “assess unaccounted income both inside and outside the country”. They were submitted to the Union finance ministry in July and August 2014, are the latest estimates of black money.

The NCAER said in its report that the quantum of black money outside India could be between $384 billion and $490 billion between 1980 and 2010. The report added that there was a “declining trend” in the 1990s and that the quantum bottomed out around 1998 but witnessed an “increasing trend thereafter”.

NCAER added: “It appears that a greater proportion of the concealed wealth is lying within the domestic economy and only a small fraction is outside the country”

NIFM, an autonomous body under the finance ministry, said in its report: “Results of estimation suggest that total illicit outflow at present value [including opportunity cost] from India in the reform period [1990-2008] is Rs 941,837 crore [$216.48 billion].”

The NIPFP’s report, submitted in December 2013, didn’t give any specific value of black money but pegged it at 0.2% to 7.4% of India’s Gross Domestic Product (GDP). That translates to between $3.6 billion and $133.2 billion at the then prevailing exchange rates.

The finance panel of the last Lok Sabha was headed by Congress leader M Veerappa Moily. According to a member of the panel, the report was submitted to former Lok Sabha Speaker Sumitra Mahajan. It was tabled in the House on Monday, at a time when Prime Minister Narendra Modi has renewed his commitment to bring back black money.

In his speech to the joint sitting of both Houses, President Ram Nath Kovind said, “The campaign against black money will be taken forward at a faster pace. Now we are receiving information in this regard from 146 countries, including Switzerland. Of these, we have concluded agreements with 80 countries for automatic exchange of information. We are now receiving information about all those who have stashed black money abroad.”

“Unless the government gets hard information on offshore bank accounts of Indians located in tax havens and other foreign jurisdictions, there won’t be any progress on this front. Domestically, an overhaul of the tax administration is necessary to curb black money,” said economist Prasenjit Bose.

First Published: Jun 24, 2019 22:03 IST