The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:
The Finance Ministry’s White Paper on Black Money presented in
parliament reflects a trite exercise devoid of any political will.
Neither has any credible estimate of black money stashed abroad been
provided by the white paper nor any concrete measures suggested to
retrieve the illicit funds.
The paper states that the total amount held in the Indian deposits
of Swiss Banks fell from Rs. 23373 crore in 2006 to Rs. 9295 in 2010.
The government seems to have no clue as to where this amount has gone.
There is no assessment of Indian deposits in other offshore financial
centres. The paper suggests that much of illicit financial outflows are
round-tripped into India through FDI via the Mauritius route or via FII
investments through Participatory Notes. Yet there is no specific
recommendation to ban Participatory Notes or to scrap the DTAA with
Mauritius.
The paper cites the Global Financial Integrity study which
estimated the current value of illicit financial flows from India
between 1948 and 2008 to be around $462 billion (Rs. 25 lakh crore
approximately). The fact that these are not gross overestimates can be
seen from the information provided by the white paper: over the last two
financial years (2010-2012) alone the Directorate of Transfer Pricing
has detected mispricing (such as over-invoicing and under-invoicing of
imports and exports) to the tune of a whopping Rs. 67768 crore in 1343
cases. Rs. 48951 crore has also been collected by the Directorate of
International Taxation in just two years, between 2010 and 2012. It is
clear that these amounts detected or collected over the past two years
still comprise the tip of the iceberg.
The white paper reveals that the amounts of undisclosed income of
Indians, who figure in the lists of secret bank account holders received
from the German and French governments respectively, are Rs. 40 crore
and Rs. 565 crore only. These are minor parties. The Indian individuals
and entities, who are holding bulk of the illicit wealth in offshore
accounts, are yet to be identified. The white paper disappointingly
reiterates the myriad technical difficulties involved in retrieving
these huge amounts stashed abroad.
The lack of progress in this direction raises doubts over the
sincerity of the UPA government on this crucial issue. The Polit Bureau
of the CPI (M) demands that a serious effort be made to quantify illicit
funds stashed abroad by Indians and identify the culprits. Undisclosed
assets of Indians located abroad should be confiscated by the government
as per the provisions of the Income Tax Act.
