(M.K. Venu is Executive Editor of Amar Ujala publications group)Upon hearing of the names of a few "illegal" holders of bank accounts in Switzerland who were outed to the Supreme Court today, the irrepressible Ram Jethmalani said, "A mountain of labour has produced a mouse. The Finance Minister and Attorney General must tell us why only a mouse has been produced."
Jethmalani, Baba Ramdev and many Sangh Parivar luminaries have contributed to this "mountain of labour" in these past few years in their demand to bring back Indian black money sitting abroad. It was one of the BJP's key election campaign promises. A specially set-up BJP task force had estimated that the total black money abroad added up to over $ 1 trillion. And now, what is eventually revealed from essentially a stolen list of accounts held by Indians at an HSBC bank in Switzerland is a few names of businessmen who either deny the account or assert that the account was opened legally. Pradeep Burman of Dabur Group says that as an NRI, he was legally entitled to open an account at HSBC, Switzerland.
Former UPA minister, Parneet Kaur, who also received a tax notice, says she has no account in HSBC, Switzerland - and the notice was sent to her in 2011, curiously when her own government was in power. A few other Congress leaders are allegedly being investigated, but their identities are not known.
So the key question is why did the BJP government make such a feeble attempt at fulfilling one of its biggest election promises? Finance Minister Arun Jaitley could be haunted more from within than without. After all, the Sangh Parivar will demand the legitimate fruits for its "mountain of labour". One doesn't blame Jaitley because he himself may become a victim of his own party's hype on black money. Legally and technically, the Finance Minister's position was right when he said international treaties at present do not allow India to procure an exhaustive list of Indians holding "illegal" bank accounts in some two dozen tax havens across the US, Europe and Asia. Our tax treaties generally say only those cases where Indian investigative agencies have evidence of tax or other criminal violations will be considered for disclosing the identity of the account holder.
The infamous HSBC list - stolen by a French employee in Geneva a few years ago - has a little over 600 names, most of whom have surnames which clearly indicate they are from a relatively rich state in India touted for its governance model! Many of these people have shown zero balance in their accounts. This is because the list was stolen by an HSBC employee on a particular day in 2006. What might have transpired a few months before or after that date is anybody's guess. So the list itself, stolen on a particular day, is totally incomplete.
It appears the government was under pressure after a scathing attack from the opposition to reveal some names, so the HSBC list came in handy. Otherwise, as per existing treaties India has with other countries, the government cannot procure an exhaustive list of all bank accounts held by Indians abroad. For this a separate treaty will have to be negotiated. This was the UPA's position then. Embarrassingly, it is the NDA's position now.
Tragically, the BJP has fallen into the trap it thought it was laying for the UPA during the election campaign. Now Finance Minister Arun Jaitley, whose official position before the Supreme Court on black money is the same as that of UPA's, is being viciously attacked by members of the wider Sangh Parivar for whom bringing Indian black money from abroad is sacrosanct, come what may.
Meanwhile, another 1000-page report by the Finance Ministry's think tank NIPFP, submitted to Jaitley a few weeks ago, says the black money generated every year within India between 1980 and 2007 ranges from 45% to 70% of GDP. That puts annual black money generation within India at over $ 1 trillion a year or close to $ 3 billion a day! This will be Jaitley's real worry in the future.
The fact is black money cannot be categorised as strictly residing in India or abroad. What is produced annually in India goes abroad and gets laundered back multiple times through tax havens like Mauritius. The best case for India is to first put in place a framework of policies to attack the domestic generation of black money so that the incremental bleeding stops. Simultaneously, it must try to do agreements with foreign governments to get its share of tax on past cases of black money stashed by Indians abroad.
Mere grandstanding based on stolen and terribly inadequate information will not do.
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