Black money stashed outside India is estimated at $216-490 bn, say studies

MPs’ panel: There’s huge variation in estimates of black money circulation from 7% to 120% of GDP

Various studies and estimates have pegged black money circulation in India anywhere between 7 per cent and 120 per cent of the country’s gross domestic product (GDP) in 2009-10 and 2010-11. This was revealed by the standing committee on finance, quoting various studies and estimates. It highlighted the lack of a reliable estimation of unaccounted income and wealth. Given that the GDP stood at Rs 64.5 trillion in FY10 and Rs 76.7 trillion in FY11 (in old series), black money could amount to Rs 4.5-77.4 trillion in FY10 and Rs 5.3-92.08 trillion in the following year.

These estimates were given by the National Institute of Public Finance and Policy (NIPFP), the National Council of Applied Economic Research (NCAER), and the National Institute of Finance Management (NIFM). The previous UPA government had commissioned studies by these institutions. The report, submitted to Parliament on Monday, also quoted these studies, estimating that the black money stashed away by Indians abroad was in the range of $216.48 billion to $490 billion between 1980 and 2010.

Besides, the committee, chaired by former law minister Veerappa Moily, pressed for the earliest introduction of the direct taxes code (DTC) in order to simplify and rationalise direct tax laws in the country. Moily told Business Standard that the Income Tax Act, due to its various amendments, had become a ‘fountain of black money generation’, and hence the entire Act needs to be simplified instead of making adhoc amendments.

Black money chase: Noose tightens on Swiss accounts; 50 Indians get notices

These individuals largely include businessmen associated with companies, including the dummy ones, in sectors ranging from real estate, financial services, technology and telecom to paints, home decor

Swiss authorities are in process of sharing details of at least 50 Indian nationals having accounts in Switzerland-based banks, with regulatory and enforcement agencies in the two countries tightening their noose on individuals suspected to have amassed illicit wealth.

These individuals largely include businessmen associated with companies, including the dummy ones, in sectors ranging from real estate, financial services, technology and telecom to paints, home decoration, textiles, engineering goods, gems and jewellery. Officials involved in the process of mutual administrative assistance between the two countries said. Switzerland has been striving hard for the past few years to shed a long-standing perception of it being a safe haven for black money, while the issue has been a politically sensitive one in India as well.

When the Modi government first came to power in 2014, it had termed the crackdown on the black money, including those allegedly parked in Swiss banks, as a key focus area. Since then, the two countries have strengthened their framework for the exchange of information in cases of financial wrongdoings, including by signing the global automatic exchange of information framework.

The two countries have also strengthened their bilateral pact on this front and the economic considerations for boosting the bilateral economic ties have further helped increase the cooperation when it comes to bringing to book the people with dubious records, especially in amassing illicit wealth. Citing the federal gazette notifications issued by the Swiss government to the concerned individuals, the officials said at least 50 Indian nationals have been issued notices in the past few weeks giving them one final opportunity to appeal against proposed sharing of their details with the Indian authorities.

Some of these notices have followed after the preliminary appeals by the concerned clients of Swiss banks have already been rejected due to inadequate supporting facts and documents, leaving a limited chance of their further pleas getting heard, officials said.

Disclose details of electoral bonds before May 30: SC to political parties

The Supreme Court said that the issue of electoral bonds requires detailed hearing and so it will announce the date for final hearing later

The Supreme Court on Friday said that all political parties who have received donations through electoral bonds must submit details to the Election Commission of India in a sealed cover before May 30.

In an interim order, the apex court asked political parties to give details of donors who donated through electoral bonds, amounts received from them, details of payment received on each bond etc. to the poll panel. The court said the issue requires detailed hearing and so it will announce the date for final hearing later. “We will examine in detail changes made in law and ensure balance does not tilt in favour of any party,” the court said.

The top court also directed the Finance Ministry to reduce window of purchasing electoral bonds from 10 days to five days in April-May. Association for Democratic Reforms (ADR), an NGO filed an application in the apex court seeking stay on the Electoral Bond Scheme, 2018 which was notified by Centre in January last year. In its plea, ADR had said amendments carried out in relevant Acts have “opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies which can have serious repercussions on the Indian democracy”.

The government has defenced electoral bonds in the top court arguing the scheme was “a pioneering step” to bring poll reforms “ensuring transparency” and “accountability” in political funding.

Black day vs anti-black money day: BJP, Opposition face off over note ban

Manmohan Singh said if anyone benefited demonetisation, GST, it was China whose imports to India grew by 23% in just 1 year

A year into demonetisation – Anti-Black Money Day, the opposition and the government on Tuesday exchanged verbal blows over the action with former Prime Minister Manmohan Singh calling it disastrous while Finance Minister Arun Jaitley rejected the charge saying there was an ethical and moral rationale behind the decision which had given a “new direction” to the economy.

Jaitley, however, acknowledged that the “benefits may not be immediately visible” but would make future generations proud.

Fielded by the party in poll-bound Gujarat, Manmohan Singh said the measure had failed its ostensible purpose of curbing wealth accumulated through tax evasion as it was known by now that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met.

ALSO READ: War of words: It’s govt’s ‘anti-black money day’ vs Oppn’s ‘black day’

“The fact that more more than 99 per cent of the (spiked) currency came back into the banking system has punctured the government’s claim. There are also widespread reports of the rich converting their black money into white while the poor have undergone immense suffering,” he said, “invoking the memory of more than a hundred people who lost their lives last year in the wake of the demonetisation”.

Calling the withdrawing of 86 per cent of legal tender in one single stroke as undemocratic and a coercive move, the former Prime Minister said “the demonetisation was clearly not the solution” to end the menace of black money and tax evasion in India.

“Demonetisation has proved to be a mere bluster to reap political dividends while the real offenders have escaped,” he said, again calling it “an organised loot and legalised plunder”. | READ MORE

Now, Aadhaar may be made mandatory for buying shares, mutual funds

When the new rule will come into effect and whether Aadhaar will completely replace PAN is not known

The government might soon make Aadhaar mandatory for buying shares and mutual funds to prevent the conversion of black money into white through the stock market, the Economic Times reported on Thursday.

According to the financial daily, the government and the Securities and Exchange Board of India (Sebi) are planning to link financial market transactions to Aadhaar after, according to two sources cited by the report, the former came to realise that the permanent account number (PAN) might not be sufficient in putting an end to tax evasion.

"We have been told that making Aadhaar compulsory is in the offing," a top official with a financial services firm told the financial daily. (economic policy)

However, according to a CEO of a brokerage firm, who spoke to the financial daily on the condition of anonymity, the move could unsettle some "regional players" who could see a "dip in activity even in IPO market". However, the source said this dip would be temporary. According to the unnamed CEO, these players would be worried over how many clients would remain once Aadhaar is made mandatory.

According to the report, when such a compulsory linking will come into effect is unclear. Further, it is not known yet whether the Aadhaar will serve as the sole identification number for financial market transactions, thereby replacing the PAN.

Is PAN not enough?

Brokers who spoke to the financial daily said that PAN has not been able to prevent people from using the stock market for money laundering. They said that multiple PANs and fake demat accounts were being used to bring in black money into the stock market.

(Read more)

Over 1 million PANs deleted: Check if your card is still active

A person can not be registered with more than one PAN

number

As on July 27, 11,44,211 duplicate PANS have been identified. PAN is the key identifier of taxable entity and aggregator of all financial transactions undertaken by one person.

More than one million permanent account numbers (PANs) were deleted or de-activated by the government, in a move to check fake identities. Reportedly, as on July 27, 11,44,211 duplicate PANS have been identified, said Indian Express. PAN is the key identifier of taxable entity and aggregator of all financial transactions undertaken by one person.

As per government rules, a person cannot be registered with more than one PAN number. The Indian Express reported that the government also detected fake PAN cards which were allotted to non-existing individuals or to people who have submitted false information about themselves.

How to check if your PAN is still active

1. Visit the Income Tax e-filing portal - www.incometaxindiaefiling.gov.in

2. On the homepage, under the ‘Services’ tab, click ‘Know your PAN’

3. The website will take you to a new page where you will be asked to enter - name, gender, religion, date of birth, registered mobile number and click ‘Submit’.

Over 1 million PANs deleted: Check if your card is still active

4. Enter the OTP or one-time password received on the registered mobile number and click on Validate.

5. If your PAN is valid, it will show as ‘Active’ under the remarks column.

Over 1 million PANs deleted: Check if your card is still active

PANs were deactivated during 2004-2007 too.....

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20 Indians, including politicians, movie stars have Swiss accounts: Whistleblower

If Federal Court rules in his favour, Rudolf Elmer would release data from Julius Baer bank

In the quiet village of Rorbas, just outside Zurich, Rudolf M. Elmer has been fighting a 12-year-long legal battle against the centuries-old traditions of Swiss banking secrecy. Elmer, who ran the Caribbean operations of the Swiss bank, Julius Baer, for eight years before being dismissed in 2002, was part of the first wave of Swiss bank whistleblowers who helped expose the inner workings of a system that helped the world’s rich and multi-nationals conglomerates evade billions of dollars in taxes through offshore financial structures and tax havens.

In 2011, he was tried for sharing information about tax evasion, money laundering and other financial violations with US tax authorities and WikiLeaks. Over the past six years, Elmer has been imprisoned for 200 days, some of it in solitary confinement, and has fended off an orchestrated harassment campaign against his family...

 #Economypolicy

Edited excerpts:It’s been 15 years since you left Julius Baer and since then we’ve seen more whistleblowers, leaking greater amounts of data on illicit global financial flows. But we’ve also seen some international cooperation over cracking down on tax evasion. How much have things changed?

Well, the question is have things really changed? It looks like to the man on the street that there is a lot of change going on in favour of the public over the last 15 years. In my view, generally speaking, yes there is a lot of talk. But actually not that much has changed, to be crystal clear....

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Note ban idea itself is wrong, don't blame execution: Rajiv Bajaj

Bajaj Auto's total domestic sales were down 16% to 1,35,188 units

 

LATEST NEWS | Peeved at the hurdles being faced by his company to launch its quadricycle in India, industrialist Rajiv Bajaj on Thursday said stifling of innovation by regulatory agencies will turn Made In India into Mad In India, taking potshots at the Centre’s flagship manufacturing initiative.

Stating the quadricycle is being sold across countries in Europe, Asia and Latin America, the managing director of Bajaj Auto wondered why a vehicle, which is cleaner, fuel-efficient, safer and whose benefits are as “obvious as daylight”, is facing troubles.

With the adverse impact of demonetisation continuing to hamper two-wheeler sales, Rajiv said the idea of demonetisation itself was “wrong” and it is incorrect to blame only the execution side of it.

“If the solution or the idea is right, it will go like a hot knife through butter. If the idea (demonetisation) is not working, don’t blame execution I think your idea itself is wrong,” he said at the annual Nasscom leadership forum in Mumbai.

The ban on 86 per cent of the total currency worth Rs 15.55 lakh crore in circulation impacted economic activity across sectors with the consumption-driven ones being the most affected. Notably, the two-wheeler sales are yet to recover from the impact of demonetisation and industry data releases over the past two months have been showing a slump.

Bajaj Auto recently said the company’s total domestic sales in January dipped 16 per cent to 135,188 units from 161,870 units sold during the same period last year.

Based on data provided by the Society of Indian Automobile Manufacturers, two-wheeler sales stood at 1,243,251 units in November, compared with 1,320,552 units during the corresponding month last year. 

Rajiv said individualisation and uniqueness is important to stand out. “We are able to deliver 22 per cent earnings before interest, tax, depreciation and amortisation (Ebitda), which is double the industry standards, which means there is something unique. Something that is good for Infosys may not be good for Tata Consultancy Services, especially in recent times.”

READ MORE ...

Black money fight against big people, not small traders: PM Modi

He adds, 'I will get money out of these big people'

 

LATEST NEWS | Prime Minister Narendra Modi on Wednesday said the fight against black money was targeted at "big people" and "big babus" and small traders need not worry.

He said this while addressing 'Parivartan Sankalp Rally' in Ghaziabad on the penultimate day of campaigning for the first phase of Uttar Pradesh assembly elections, even as he hit out at the Samajwadi Party (SP) government for "nursing" crime and corruption.

The Prime Minister also emphasised on the importance of demonetisation exercise and the larger purpose for which it had been implemented.

"My black money battle is against big people, big babus ('bade babus'), small traders are not on my agenda, I want to tell people... And, I will get money out of these big people," Modi said.

The Centre has been insisting that demonetisation is aimed at curbing black money, but small traders, who largely deal in cash, have felt the pinch as its fallout.

The Prime Minister also made a reference to a Karnataka minister, from whose premises huge undisclosed assets were seized last month.

"I am after big people, big ministers amassing illegal wealth, not small businessmen. Recently, I-T found undisclosed money at the premises of a Karnataka minister," he said.

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