|Tuesday, 19 July 2011 00:00|
In the beginning was the word ... or the Global Financial Integrity (GFI) study which said Indians had stashed $462 bn abroad and, in 2009, LK Advani promised his party would bring this money back to India if voted to power. That was not to be. But he has had plenty of reason to be happy this year, what with everyone from Ramdev to the Supreme Court giving traction on the matter, hauling up the government for not doing enough to bring this big wealth back to India—we dreamed of all the roads and hospitals we could build, more so since Ramdev said the figure was more like $8.8 tn (R400 lakh crore). But FE has never bought the GFI claim that the black portion of India’s economy has risen over the years, given how sharply tax rates have fallen and how open the economy has become; even more difficult to believe was the claim that the stash abroad was rising—given the huge returns in property and stock markets here and how Mauritius made it easy to bring back money and how much was coming in, it just didn’t seem kosher. Well, the Swiss central bank’s president’s spokesperson has said the Swiss banks have just $2.5 bn from Indians , down from $2.7 bn in 2009 and $3 bn in 2008.
Under post-Lehman pressure from the US, OECD and G20, the Swiss have been relaxing the confidentiality provisions of numbered accounts, and this is what the Supreme Court and Advani/Ramdev have been saying India needs to push for. If we do, we’ll likely get details for just $2.5 bn, not $8.8 tn. The challenge of proving criminality for these funds is even bigger.