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    Main article: Indian black money

    Black money refers to money that is not fully legitimately the property of the ‘owner’. A white paper on black money in India by the Government of India suggests two possible sources of black money in India.[9] The first includes activities not permitted by the law, such as crime, drug trade, terrorism, and corruption, all of which are illegal in India. The second, more likely source is that the wealth may have been generated through a lawful activity but accumulated by failing to declare income and pay taxes. Some of this black money ends up in illicit financial flows across international borders, such as deposits in tax haven countries.

    A November 2010 report from the Washington-based Global Financial Integrity estimates that over a 60-year period, India lost US$213 billion in illicit financial flows beginning in 1948; adjusted for inflation, this is estimated to be 462 billion in 2010 dollars, or about $8 billion per year ($7 per capita per year). The report also estimated the size of India’s underground economy at approximately US$640 billion at the end of 2008 or roughly 50% of the nation’s GDP.Black Money in Switzerland According to a 2010 The Hindu article, unofficial estimates indicate that Indians had over US$1456 billion in black money stored inSwiss banks (approximately USD 1.4 trillion). While some news reports claimed that data provided by the Swiss Banking Association Report (2006) showed India has more black money than the rest of the world combined, a more recent report quoted the SBA’s Head of International Communications as saying that no such official Swiss Banking Association statistics exist.[57]Another report said that Indian-owned Swiss bank account assets are worth 13 times the country’s national debt. These allegations have been denied by the Swiss Bankers Association. James Nason of Swiss Bankers Association in an interview about alleged black money from India, holds that “The (black money) figures were rapidly picked up in the Indian media and in Indian opposition circles, and circulated as gospel truth. However, this story was a complete fabrication. The Swiss Bankers Association never published such a report. Anyone claiming to have such figures (for India) should be forced to identify their source and explain the methodology used to produce them.” In a separate study, Dev Kar of Global Financial Integrity concludes, “media reports circulating in India that Indian nationals held around US$1.4 trillion in illicit external assets are widely off the mark compared to the estimates found by his study.” Kar claims the amounts are significantly smaller, only about 1.5%[dubious – discuss] of India’s GDP on average per annum basis, between 1948–2008. This includes corruption, bribery and kickbacks, criminal activities, trade mispricing and efforts to shelter wealth by Indians from India’s tax authorities. According to a third report, published in May 2012, Swiss National Bank estimates that the total amount of deposits in all Swiss banks, at the end of 2010, by citizens of India were CHF 1.95 billion (INR 92.95 billion, US$ 2.1 billion). The Swiss Ministry of External Affairs has confirmed these figures upon request for information by the Indian Ministry of External Affairs. This amount is about 700 fold less than the alleged $1.4 trillion in some media reports. The report also provided a comparison of the deposits held by Indians and by citizens of other nations in Swiss banks. Total deposits held by citizens of India constitute only 0.13 per cent of the total bank deposits of citizens of all countries. Further, the share of Indians in the total bank deposits of citizens of all countries in Swiss banks has reduced from 0.29 per cent in 2006 to 0.13 per cent in 2010.