{"id":1167,"date":"2012-11-10T11:20:44","date_gmt":"2012-11-10T05:50:44","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=1167"},"modified":"2012-11-10T11:20:44","modified_gmt":"2012-11-10T05:50:44","slug":"1167","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2012\/11\/10\/1167\/","title":{"rendered":"45% of black money abroad has gone during UPA regime"},"content":{"rendered":"

\"\"<\/a>
\n<\/b>Vivek Kaul<\/strong><\/p>\n

\u00a0<\/strong><\/h3>\n

It\u2019s a season of clean chits. The latest to join the bandwagon is Annu Tandon, the Congress Lok Sabha MP from Unnao, supposed to be close to Congress general secretary Rahul Gandhi. \u00a0“Allegations against me are absolutely baseless and malicious… I completely deny all this rubbish,” Tandon said, giving herself the clean chit.
\n\u201cI had gone to the Congress meeting and have just learnt of the allegations\u2026I feel saddened that instead of doing something to benefit the nation we are speaking about lowly matters,\u201d she said, adding that Kejriwal was perhaps seeking publicity by making such allegations. She stopped short of saying I am ready to face any investigation, as politicians are won\u2019t to say in such cases.
\nArvind Kejriwal\u2019s in his latest exposure has said that about Rs 6000 crore of black money was lying in the Geneva branch of HSBC as on July 2011.\u00a0 This list included the brothers Mukesh and Anil Ambani, Reliance Industries, Motech Software (a Reliance Group company whose managing director Annu Tandon was), Naresh Goyal \u00a0of Jet Airways and Sandeep and Annu Tandon. Annu Tandon and her late husband Sandeep have been accused of having Rs 125 crore each stashed away in their HSBC Swiss Bank account.
\nThere is no way of independently verifying who has how much stashed away in the Geneva branch of HSBC, unless the bank chooses to reveal it. But at a broader level it can safely be said that a lot of Indian money does end up in Swiss banks and other tax havens abroad.
\nAnd the quantum of this money going out of India is huge. A report titled Illicit Financial Flows from Developing Countries Over the Decade Ending 2009<\/i><\/a> released by Global Financial Integrity in December 2011, gives us some astounding numbers. This report was written by economists Dev Kar and Sarah Freitas and was supported by the Ford Foundation.
\nIn the period 2000-2009 the illicit capital flows from India stood at a whopping $104billion. Currently one dollar is worth around Rs 55. Hence in rupee terms this amounts to a huge Rs 5,70,00 crore. To give the reader a sense of comparison the fiscal deficit of the government of India for the financial year 2012-2013 ( i.e. the period between April 1, 2012 and March 31, 2013) was initially estimated to be at Rs 5,13,590 crore. Fiscal deficit is the difference between what the government earns and what it spends. So the black money that went out of India in the period 2000-2009 was more than the fiscal deficit of the government of India in the current financial year. Hence the numbers clearly aren\u2019t small by any stretch of imagination.
\nAnd this not a recent phenomenon. In another report titled The <\/i>Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008<\/i><\/a>brought out by Global Financial Integrity and written by economist Dev Kar, it is shown, that black money has been going out of India for decades, though it has gone up in recent years.
\nKar estimates that in a period of 61 years from 1948 to 2008, India lost a total of US$213 billion dollars due to illicit flows, the present value of which is at least US$462 billion. In rupee terms this works out to a whopping Rs 25,317,60 crore.\u00a0 This number is almost 5 times the fiscal deficit of the government of India for the year 2012-2013.
\nAnd chances are this number is understated. As Kar writes \u201cIn all likelihood, this estimate is significantly understated because economic models can neither capture all the channels through which illicit capital can be generated nor the myriad ways in which the capital can be transferred.\u201d
\nIn an interview<\/a> I carried out for the Daily News and <\/i>Analysis (DNA) in April 2009, Professor R Vaidyanathan of IIM Bangalore had put the number at $1.4trillion or more than Rs 70lakh crore at that point of time. \u00a0\u201cMore amounts were stashed away during the Nehruvian socialist regime…In fact, in those days, the Indian rupee commanded a better value per US dollar, so fewer rupees could get a dollar. Hence the estimation that Indian money stashed away may be of the order of $1.4 trillion,\u201d Vaidyanathan had said.
\nAnother estimate has been put forward by Arun Kumar, a professor at the Jawahar Lal Nehru University in New Delhi and the author of Black Money in India<\/i>. An article<\/a> on Firstpost quotes him as saying \u201cAt least $70-80 billion goes out every year.\u201d That is an astonishingly huge number. In comparison Kar and Freitas put the total amount of money that went out of India between 2000-2009 at $104billion.
\nWhat is interesting is that a major portion of the black money in India ends up at Swiss Bank and other tax havens abroad. As Kar puts it \u201cThe total value of illicit assets held abroad represents about 72 percent of the size of India\u2019s underground economy which has been estimated at 50 percent of India\u2019s GDP (or about US$640 billion at end 2008)…This implies that only about 28 percent of illicit assets of India\u2019s underground economy are held domestically, buttressing arguments that the desire to amass wealth without attracting government attention is one of the primary motivations behind the cross-border transfer of illicit capital.\u201d
\nKar\u2019s research also shows that a lot of black money has gone abroad since the United Progressive Alliance (UPA) government led by Sonia Gandhi came to power. Between 2004 and 2008 around $96.3billion dollars of black money has gone abroad. Kar puts the total flow from 1948 to 2008 at a little over $213billion. This means that nearly 45% ($96.3billion expressed as a percentage of $213 billion) of the total black money that has gone abroad since independence has gone during the rule of UPA. UPA came to power in May 2004.
\nWhat this clearly tells us is that crony capitalism has gone through the roof since Manmohan Singh became the Prime Minister of the country. Businessmen and politicians are the most likely candidates for sending their ill gotten wealth abroad. Also, the data is available only till 2009, and corruption has only gone up since then.
\nThe money going abroad has also gone up since India adopted a policy of economic liberalisation in 1991. Between 1991 and 2003 around $50.3 billion of black money went abroad, as per Kar\u2019s estimates. Hence between 1991 and 2008, a total of $ 146.6 billion ($50.3billion + $96.3 billion) of black money has gone abroad.
\nAll this money going abroad has had a huge impact on the economic development of India. As Arun Kumar wrote in an article<\/a> in The Hindu in August 2011 \u201cIndia could have been growing faster, by about 5 per cent, since the 1970s if it did not have the black economy. Consequently, India could have been a $8-trillion economy, the second largest in the world. Per capita income could have been seven times larger; India would then have been a middle-income country and not one of the poorest. That has been a huge cost.\u201d
\nAnnu Tandon in her reaction to the accusation of stashing away black money to the tune of Rs 125 crore abroad said \u201cI feel saddened that instead of doing something to benefit the nation we are speaking about lowly matters.\u201d
\nYes these are lowly matters but given that they have cost the nation so much, they need to be talked about. And since the government and the Congress Party refuse to talk about these things it\u2019s up to the likes of Arvind Kejriwal and Prashant Bhushan to bring it to the notice of the nation. \u00a0And if that means, as Tandon put it that Kejriwal is seeking publicity, then so be it.
\nOh and in the end, let\u2019s be ready for another round of clean chits.
\nThe article originally appeared on www.firstpost.com on November 10, 2012.\u00a0http:\/\/www.firstpost.com\/economy\/45-of-black-money-abroad-has-gone-during-upa-regime-521434.html<\/a>
\n(Vivek Kaul is a writer. He can be reached at <\/i>vivek.kaul@gmail.com<\/i><\/a>) <\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Kaul \u00a0 It\u2019s a season of clean chits. The latest to join the bandwagon is Annu Tandon, the Congress Lok Sabha MP from Unnao, supposed to be close to Congress general secretary Rahul Gandhi. \u00a0“Allegations against me are absolutely baseless and malicious… I completely deny all this rubbish,” Tandon said, giving herself the clean … <\/p>\n

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