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New Delhi : During the Vote on Account speech, the Finance Minister P Chidambaram’s insufficient lines on the issue of illegal money signified UPA’s intent on the issue, i.e. complete lack of commitment.
In his speech, P Chidambaram said the Government has launched prosecution against 17 cases for “wilful tax evasion” and obtained information in 67 other cases. Isn’t this by far too less by any stretch of imagination, as two years ago, the UPA had said it had launched prosecution against 17 out of 16 Indians with accounts in LGT Bank in Liechtenstein, a tax haven. The information on LGT Bank cases was shared by Germany in 2008. France was the next to share details of 700 Indians with accounts in HSBC’s Geneva branch. In addition to this, the then Finance Minister, Pranab Mukherjee, in a response to a question on black money in Parliament in 2011 said the Government had received 36,000 pieces of information.
Chidambaram nor in his speech or the post Budget Press conference failed to mention about the studies conducted on illegal money by three New Delhi-based think tanks commissioned by the Government. The three institutes which were selected to undertake the study were National Institute of Public Finance and Policy, National Institute of Financial Management and National Council of Applied Economic Research. In 2011, the Finance Ministry statement said the three institutes had launched their study in March and were expected to complete the project within 18 months. The study was expected to bring out the nature of activities that encourage money laundering and its ramifications on national policy.
The year 2011 also witnessed the public discourse on the issue of corruption and black money with the active participation of the civil society. Sticking to the issue of black money specifically, notwithstanding the pressure of Baba Ramdev’s movement which was an aftermath of the famous India Against Corruption Movement of Anna Hazare’s and on BJP’s insistence which was an extension of the party’s sustained campaign against black money since 2009, the Congress-led UPA tabled a white paper in Parliament on May 26, 2012 which signalled that the Centre was least interested in the issue which has been hurting the conscience of the nation.
The white paper defined what illegal money is, it said “Black money is income on which the taxes imposed by the Government or public authorities have not been paid.” It goes on to add that this definition of black money is in “consonance” with the definition used by the National Institute of Public Finance and Policy, which in turn defined black money as “the aggregate of incomes which are taxable but not reported to the tax authorities”. In essence, this meant that even if scamsters involved in one of the UPA Government’s magnum opus scams, the 2G spectrum scam, paid taxes to the Government, they can claim not to be in possession of illegal money.
The UPA, in the document tabled then made no mention of the steps they would take the necessary steps to tackle the menace which is to track down people who have laundered huge amounts of money abroad. The regime to its credit has also struck down the Foreign Exchange Regulation Act (FERA), which used to send people to jail for money laundering. In its place is a toothless Foreign Exchange Management Act (FEMA) that merely imposes hefty penalties.
On the other side of the coin, the NDA on its part has been consistent in its campaign against black money stashed abroad. The same is discernible in the efforts led by party patriarch LK Advani which is now being taken forward by NDA’s PM nominee and Gujarat Chief Minister Narendra Modi. In 2009, BJP appointed a special task force comprising experts to prepare a strategic document for India to recommend ways to get back the national wealth stashed away illegally by corrupt politicians, businessmen and criminals. As per this task force, which studied various sources, Indian wealth illegally stashed abroad may be anywhere between 25 lakh crores and 70 lakh crores.
The obvious charge which the Congress has time and again alleged was that how serious is the NDA about the issue when it did not do anything to bring back illegal money in its tenure. This argument is best answerable with the very fact that the Swiss banks relaxed their 1934 bank secrecy laws only in 2009. Secrecy was enshrined in law in 1934 to prevent Jewish assets deposited in Switzerland from being investigated by Nazi Germany. As soon as the Western Governments like the United States were eager for revenue after the global economic slowdown, the G20 group of nations lead a crackdown on tax havens which saw Switzerland relaxing its bank secrecy law. In 2009, Switzerland said it would make information on bank clients available, but only if it received detailed requests on individual cases from other countries. Since then pressure has been built on the Swiss banks not just from the United States, but from countries like Germany (the biggest market for Switzerland private banks), Britain, and Austria etc. Though India has Double Tax Avoidance Agreements with 82 nations, including all popular tax haven countries, precious little has been done to bring back illegal money stashed abroad under the UPA leadership.
The spectre of black money is one of the biggest problems facing our country and is the root cause of terrorism to abundantly flourish. Unfortunately the Central Government does not have a clear-cut programme to tackle this menace. A parallel currency is as bad as a parallel Government. As we gear up towards the nation’s most anticipated elections, people will have to make an informed choice in the form of Narendra Modi, NDA’s PM nominee who has clearly outlined his priority on the issue. “We will bring back every single rupee in foreign countries deposited by Indian citizens as black money”, Modi has affirmed and deemed it as a personal commitment to bring back illegal money.
Highlighting ‘incentives to the honest and punishment to the guilty’, he has also gone on to add that the recovered illegal money will be distributed to honest salaried tax-payers. The UPA regime, which has not taken decisive steps to bring back illegal money, which in turn is corroding Indian polity and governance more so in the last 10 years.
Source : Niti Central
