Saturday, May 2, 2009

Getting back India's black money

t and brings back There is apparently a lot of money in foriegn bank accounts by Indians who have tried to evade taxes and also with a lot of other illicit money.
The BJP has promised to bring back the money as soon as possible. The congress on the other hand has been trying to obfuscate the issue since most of the money must be owned by Congress people.

Here is an interview of S. Gurumurthy, a renowned chartered accountant, who is part of the task force to bring the money back,

"At that time Advaniji felt as the PM was attending the April 2 meeting, he should take up this issue. But our people remained silent at the G-20 preparatory meet.
See what India did. We didn't forcefully ask the Germans to give us the particulars. When Germany and France took up the matter in the OECD, we didn't welcome it. When they took up the matter in G-20 we did not support them or join them. So, from all this arose a big question, whether the government was at all interested in working against illicit Indian monies abroad. That is why Advaniji took up the matter. As the government did not take it up, the BJP had to take it up as an electoral issue

Professor Vaidynathan is a well known faculty in IIM-B who is also a member of the task force the BJP has constituted to bring back the money,

"It is not due to our pressure but that of US which will make them co-operate. When a family is in deep financial crisis then it tries to look at the small amount saved under the sugar jar by grandma. Same way developed economies are desperate for every dollar. Even if we do not act due to their efforts the list of crooks may be out, then we will be in a dangerous social situation since the who's who of India will be there. Instead we should get it and get the funds and decide on the steps to sterilise it. Otherwise, the world will laugh at us."

From the editorial of the Indian Express,

"Mystification” is how the additional solicitor general felt about a petition in the Supreme Court, filed by several eminent Indians, seeking recovery of perhaps Rs 70 lakh crore of black money in secret Swiss bank accounts. Gopal Subramaniam was mystified by the petition’s timing; he perhaps sees BJP prime ministerial candidate L K Advani’s promise of a 100-day plan to retrieve that black money as being an election gimmick.
His suspicions were echoed by the Congress party’s candidate for Leader of Opposition, Rahul Gandhi, who promised voters in Hyderabad an enquiry. “The BJP would forget their promises of unlocking the money from Swiss bank accounts because they know there was no such money anywhere,” young Rahul thundered, mystifying listeners about what exactly would be enquired — the very fact of black money or the BJP’s sincerity. In any case he did not promise to bring back any money from abroad.
Congress strategist Jairam Ramesh has gone from blue-eyed to cross-eyed over the amount that Advani claims was salted away between 2002 and 2006. Research by Advani’s task force suggests it could be Rs 70 lakh crore, the higher end of estimates in the Global Financial Integrity report of the Washington-based Centre for International Policy; Jairam cites the lower end of those estimates, about Rs 14 lakh crore. That still seems like a hell of a lot of money.
Jairam also coyly proposes that the negative flow in India’s capital account suggests a reversal of capital flight — meaning that people are stashing their black money in India. So that’s why we had participatory notes for foreign investors! Now it all makes sense. The UPA was trying to turn India into a nuclear-powered Swiss bank. Thank God for the global economic slowdown.
Even the man behind the PNs, P Chidambaram, whose IQ is higher than the Sensex (in contrast to those politicians whose IQs are lower than the current dollar price of crude oil per barrel) is mystified. He wondered in Sivaganga whether Advani’s 100- day action plan was a smokescreen: “I wonder whether he is unwittingly alerting those who have deposits abroad to re-arrange their affairs in the next four weeks before a new government is sworn in.” So Chidambaram is accusing Advani of both deliberation (by fiendishly setting up a smokescreen) and inadvertence (by unwittingly alerting those with foreign piles). He is like a sophist on steroids. Also, he should be careful lest someone alert his boss Sonia Gandhi that he is going around openly declaring that these are the Congress party’s last four weeks in power, and that the UPA will be handing the reins of government to someone else.
Congress spokesperson Kapil Sibal is another brainy guy, but he refuses to succumb to mystification. Rather, he scoffs at Advani’s plan as he believes that Advani does not know the legal procedure for getting black money back from Swiss banks.
That’s like saying that Advani cannot file his tax returns because he does not know how to fill out the form. It also appears to ignore one minor event in London at the beginning of this month: the G20 meeting.
You may recall that the G20 decided to crackdown on tax havens by agreeing to fix the loopholes that currently exist around hedge funds and tax havens. This has come shortly after America’s threats to UBS of Switzerland to reveal the estimated 52,000 accounts held by Americans. The US said that about $15 billion dollars of untaxed money were held in the Swiss bank. Our tax laws may differ from the USA’s, but it appears that there is a new global political will to end this convenience for the fabulously wealthy, and that there will be concerted legal action to do so. Even if India does not have the requisite legal tools, formulating new ones will not be difficult in the new global environment.
What is common to all the statements by this galaxy of Congressmen is the accusation that the BJP is looking to derive political mileage from the promise of a 100- day action plan; that the NDA government did nothing about recovering black money during its tenure; and that the retrieval of black money is a minor derivative issue, meant to detract from weightier issues that confront the nation.
It may well be that talk of recovery of such monies will not generate the wave of votes that can propel the BJP into power.
It appears that most voters, and even those who are paying attention, do not comprehend the enormity of the sum involved; eve n i f we see the number 7,00,00,00,00,00,000, we do not understand it. If they do not understand it, how can it become an emotive issue for them? Yet the reason that Advani has mooted it, and why Rahul is dismissive, is that for their parties these elections are a neck-andneck race. Every incremental gain is unquantifiable but necessary if the final tally of each party is to be pushed up, piecemeal, to 150 seats or more. Hence emotive or not, each issue is a worthwhile pursuit. The argument that it is politically motivated is nonsensical, because all policy initiatives in a democracy must be politically motivated.
Elections are the best time to test a policy proposal; it is when you have people’s attention, and when the politician’s patience with voters is inexhaustible. The world’s most successful politician currently is Barack Obama, and it was during his gruelling campaign that he fine-tuned or fleshed out many of his ideas and policy proposals. In this context, any accusation of gimmickry sounds more like “sour grapes”.
It is equally misguided to say that the BJP will drop its proposal on May 14, the day after the last round of polling, or to wonder why nothing happened during the tenure of A B Vajpayee. If the BJP does forget this promise, it will not be the first party in India or abroad to do so, but that seems unlikely given the kind of research already put in by Advani’s task force. As to why nothing happened during the Vajpayee tenure is tantamount to wondering why Vajpayee did not solve the Kashmir issue.
Whatever be the many reasons, does it mean Advani should not try to resolve it? Certainly there are weightier issues confronting the nation, but it appears that all parties have made their broad ideologies clear in these elections, and what remains are their details of proposed governance.
The BJP has promised to honour the nuclear deal with the USA, another issue that carries no emotional weight with voters (as evidenced by the Congress party’s campaign amnesia on Manmohan Singh’s single achievement in five years), but it is another detail that sharpens the image of the party in the voter’s mind. Congressmen may suffer mystification, but it is certain that the Indian voter does not.

About The Author:
Aditya Sinha is the Editor-in-Chief of The New Indian Express and is based in Chennai.

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