Political
Reforms
Governments are elected by people and may be run by some of those who
own Swiss accounts, then how will Advaniji succeed in getting back US$500
Billion stashed in Swiss Banks?
A serious campaign during the recent general elections is being launched
on getting back the dirty money (to the tune of US$500 Billions) lying
in Swiss Banks. SMSs have been sent on behalf of BJP, which reads thus:
"TM-BJP
Rs. 25 lacs crores, belonging to Indians, is estimated to be stashed
away in Swiss Banks. We will do our utmost to bring this wealth back
to India- L.K. Advani".
Other parties, including the left parties too have also echoed voices
on getting back the money. However, some parties have maintained a silence
over the issue.
There is no precise estimate of the quantum of money belonging to Indians
stashed in secret accounts in tax heavens. One estimate suggests the total
amount equivalent to US$ 1.5 trillion. But, this appears to be highly
exaggerated. Another estimate accredited to a professor from Indian Institute
of Management, Ahmedabad, suggests US$ 500 billion. This estimate has
been lapped up by the Prime Minister designate of NDA, Shri L.K. Advani.
But this also appears to be doubtful. The correct estimate could be somewhere
in the region of around US$ 300-400 billions. If we were able to get back
this money in to the country, we could build all the roads, power plants,
ports and other infrastructural facilities that will put the country on
top of the league.
The question is whether NDA and Shri Advani ji will make any serious efforts
in getting back the money. We only hope that their promises would not
fizzle out the way it did in the Bofors case in 1989 general elections,
when Late Shri V.P. Singh promised in his campaign speeches to get back
the money within thirty days of his coming to power.
Who owns all the cash?
The second issue relates to the nature of difficulties involved in getting
back the dirty money. To understand this, we also need to know the people
owning this money. People who have the Swiss accounts are very-very powerful
businessmen, politicians and others, who are extremely well entrenched
in society. These are the people who make and unmake governments at the
center. They virtually make all the policies, concerning their own areas
of interest, no matter who comes to power. Will Advani ji be able to neutralize
their influence?
First group of people are politicians and the political parties, which
earned commissions on the big business deals in defense, civil contracts,
purchase of aircrafts and civil aviation equipments etc. The second source
is the regular commissions earned by politicians and bureaucrats in charge
of the petroleum sector, in the sale and purchase of oil and oil equipments
and other items. This is one sector, which could have, over the years,
contributed maximum funds lying in Swiss Banks.
Another class of people is Indian businessmen-exporters, who mostly under
invoiced their export shipments as per their convenience. They collected
part of the value of export goods in foreign countries and deposited in
tax heavens. Further, certain businessmen also over invoiced purchase
of equipment and machinery in their companies in a very routine manner
and collected the balance to be deposited in the tax heavens. The over
invoiced amounts mostly were paid through the bank loans or the share
equity funds or other sources at the cost of the stakeholders or the general
public concerned. Then there are also big businessmen, who deplete strip
their companies of cash lying in balance sheets by way of non existent
transactions and the cash drawn is transferred through hawala to offshore
accounts.
Another group is of diverse and desperate individuals, who earn money
in various ways or transfer, through black money from India to foreign
destinations. Some of those may be very influential bureaucrats, some
wealthy small businessmen, who transfer their money for their own safety
for a good future life abroad.
Hurdles in getting back Swiss money
There are a number of hurdles to be crossed in getting back the Swiss
money. First of all, the Swiss Banks under local laws offer secrecy and
can not divulge the secret information. Those Swiss laws have not been
repealed till date. The dubious logic given by those banks is that tax
evasion is not a crime in their own countries and there is no fraud involved.
Further, while US and other countries in European Union have been able
to pressurize the Swiss Banks to divulge their secrecy, India is not in
a similar position to apply the same kind of pressure either on the Swiss
government or their banks. In fact, India has not even ratified the U.N.
Convention Against Corruption (UNCAC) and hence cannot be expected to
claim back the dirty money lying in tax heavens.
Fourthly, the procedure for getting back the money would be extremely
tedious as complete details may not be available as funds may be deposited
in pseudo names and it would be difficult to bring the culprits to book.
Money could be held in accounts in the name of some powerful individuals
or their associates through offshore companies in other tax heavens. Some
of the account holders have in fact hired experts to manage their offshore
accounts. As it has happened in many developing countries including China,
some money has been re-routed as investment in to the home country through
FDI or P-Notes. The Mauritius route has been carefully and specially designed
by the powerful Indians to ensure round tripping of dirty money for maximum
profit gain and safety.
How
to go about getting the money back
The answer should be first to have tough laws on foreign funds in banks outside India. This is difficult to visualise now, as it would amount to closing the safe windows provided by the successive governments in the last about three decades for illegally acquired money for 'foreign investment' either through FDI in manufacturing, services or in stock markets. Secondly, we will have to closely associate with other countries like US and France, who are putting pressure on Swiss government. Thirdly, we should immediately ratify the U.N. Convention Against Corruption (UNCAC), which will raise our credibility in the international community and help in getting back the illegally acquired money belonging to Indians. The NRI status under the Indian Income Tax will also have to undergo a radical change in order to close the loopholes exploited by the unscrupulous Indians. There would be many other steps required as well.
The question is whether the Prime Minister designate Shri L.K. Advaniji
(or the incoming prime minister) will have the strong will to overcome
the pressures and influences of the powerful businessmen, who have the
pile of funds lying in the Swiss Banks. Only time will tell when the results
are declared and the various groups decide to form the next government.
|
