PM Narendra Modi’s promise: Money stashed by Indians in Swiss banks swells by 50%
New Delhi:MNN: PM Narendra Modi’s promise, funds stashed, by Indian moneybags, behind the Swiss banks swelled by over 50 percent to CHF 1.01 billion in 2017.
PTI reported citing official annual data released by the Swiss National Bank , the central banking authority of the Alpine nation.
This is after Indian money in Swiss banks fell by 45 percent in 2016, to CHF 676 million — the lowest ever since the European nation began making the data public in 1987, as per report .
Remember, when the Narendra Modi-led government assumed power in May, 2014, one of its biggest promises was that it would bring back black money stashed in foreign tax havens.
Now, it is incorrect to assume that all the money deposited in Swiss banks is black.
But, most governments and investigative agencies across the world do not believe so; they use the term ‘suspected black money’ for the Swiss bank deposits.
Because of the kind of secrecy Swiss banks offer their customers.
Also because of their notorious reluctance to share details with authorities of other countries.
That’s exactly why someone goes to a Swiss bank with their ill-gotten wealth and parks his money there.
Swiss bank get a hefty premium for secrecy that is not offered in most other financial institutions the world over.
But, Swiss banks are just one of the tax havens; there are many, such as Singapore and Mauritius.
Considering this, let’s assume that a big chunk of the Rs 7,000 crore is illicit money.
A major spike in Swiss deposits is a major setback for this regime and proves to be a major setback to the government’s much-hyped efforts to bring back black money from foreign lands.
The government initiated a two-pronged attack against black money stashed in India and on foreign soil.
As part of the domestic hunt, the government announced the world’s biggest-ever currency scrapping programme, in November, 2016, demonetising Rs 500 and Rs 1,000 notes constituting 86 percent of the currency in circulation;
Ordered government agencies to track down benamis; cracked down on shell companies, and commenced a large scale scrutiny of bank deposits.
These were steps in the right direction but there hasn’t been any major black money recovery so far.
That’s except a relatively smaller amount of less than Rs 5,000 crore through amnesty like schemes and about Rs 17,000 crore the IT sleuths recovered through raids.
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This is contrary to the black money recovery figures Modi himself claimed in his Independence Day speech, last year.
But, compared to what is at stake abroad, the portion of domestic black money is only a fraction for India.
According to R Vaidyanathan’s Blackmoney and Tax Havens, the amount of money Indians have stashed in tax havens could be around Rs 65 lakh crore.
Whereas, the amount of domestic black money is estimated to be around Rs 15 lakh crore, a good amount of which could be in the form of assets such as real estate and financial investments.
Now, what did the Modi government do to recover foreign black money?
The idea was to discourage the tax cheats from India from seeking the safety of Swiss-bank like institutions to hide their ill-gotten wealth and share details of those whose money is already stashed in their lockers.
The Narendra Modi government indeed made certain progress when Switzerland agreed to share some information from 1 January, 2018.
But even after four years of engaging with Swiss authorities, the fact that Indians have increased their exposure in Swiss banks by 50 percent tells us a different story.
It’s just not only about Swiss accounts; there have been multiple data leaks on tax cheats from time to time through the international media.
But, there has been very little progress in India that has translated into black money recovery — be it the Panama Papers, the HSBC list of tax evaders and the more recent Paradise papers.
For instance, a Special Investigation Team instituted by India couldn’t make much progress after it found that less than half of the HSBC bank’s list of over 600 accounts did not have any money while more than a hundred names on that list were repeated, hampering the possibility of any action against them.
In this backdrop, the latest Swiss numbers are a major setback to the Modi government’s war on black money.