The Finance Minister, Mr Pranab Mukherjee, on Tuesday said the Government has constituted a multi-disciplinary committee to get studies conducted to estimate the quantum of illicit funds generated by Indian citizens. He also spelt out a five-point strategy that the Government was adopting to address the issue of black money.
Stating that the estimates put out by various panels such as the BJP Task Force 2009 and Global Financial Integrity were based on “unverifiable assumptions and approximations,” Mr Mukherjee told a press conference here that the multi-disciplinary committee will also consult experts and find out a mechanism through which estimation was possible.
Three institutions — the National Institute of Public Finance and Policy (NIPFP), National Institute of Finance Management (NIFM) and National Council of Applied Economic Research (NCAER) — have been tasked with conducting the studies. Mr Mukherjee said that he had requested the committee to submit its report “as expeditiously as possible”.
The interim recommendations of the BJP Task Force 2009 had estimated the amount of black money to be between $500 billion and $1,400 billion. A current study by Global Financial Integrity had estimated the present value of illicit money outflow to be $462 billion.
On whether the Government proposes to come up with an “amnesty scheme” to bring back the unaccounted money stashed by Indians in foreign banks, Mr Mukherjee said that a group has been constituted within the Revenue Department to look into this matter.
“There are two aspects to this. If an amnesty scheme is introduced, then it is criticised that it is at the cost of the honest taxpayer. Sometimes it also helps to bring in some money. So I have appointed a group to make suggestions,” he said.
On the Hassan Ali case and whether Government has been possible to make any breakthrough, Mr Mukherjee said that the investigations are still on and that both the Income Tax department and the Enforcement Directorate are pursuing the matter.
To a query on why the Government was not declaring the names of Indians who had stashed unaccounted money abroad in foreign banks, Mr Mukherjee said that it was “legal prohibition” which came in the way although the information on such accounts was being made available by treaty partners. He said the names could be known as and when the tax department prosecutes the tax evaders.
Meanwhile, the five-pronged strategy for combating illicit funds consists of joining global crusade against “black money”; creating an appropriate legislative framework; setting up institutions for dealing with illicit funds; developing systems for implementation and imparting skills to the manpower for effective action, he noted.
The Finance Minister also expressed hope that it would be possible to soon get Swiss bank information for pursuing tax-related matters. “Like many well-intentioned people in society, the Government is equally interested in unearthing black money, bring it to the country as and when possible and at the same take steps to plug loopholes through which tax evasions are taking place,” he said.
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