Double Taxation Avoidance Agreement will enable transfer of banking information
As he highlighted the Union government's commitment to unearth black money stashed away in Swiss banks, Finance Minister Pranab Mukherjee told the Lok Sabha on Friday that India was awaiting Switzerland's ratification of the Double Taxation Avoidance Agreement (DTAA), which would enable it to get information relating to bank deposits there.
Replying to supplementary queries during question hour, Mr. Mukherjee said he hoped that Switzerland would ratify the treaty by September-October. India would then become eligible to get information relating to bank deposits in Swiss banks with effect from April 1, 2011.
He said the two Houses of the Swiss Parliament had ratified the accord, which was now under the consideration of the cantons (member-States of Switzerland).
The process of renegotiating the DTAA to provide for sharing banking information had been completed with four countries, Mr. Mukherjee pointed out. India was entering into agreements with 13 other countries.
India has entered into the Tax Information Exchange Agreement (TIEA) with four sovereign entities that serve as tax havens for black money; the agreement with the Cayman Islands is yet to come into force. The country is negotiating with 12 other countries to sign the TIEA.
Replying to a question, Mr. Mukherjee admitted that the proceeds gained from disinvestment had been spent, as a special dispensation, on meeting the revenue gap during the past three years, in a bid to cope with the global recession and developmental expenditure. Investments to the tune of Rs.1.87 lakh crore had been pumped into for stimulus packages. He, however, assured the House that the government would not seek to waive the policy to use 75 per cent of the disinvestment proceeds on social sectors any further, despite the fact that the situation continued to be difficult on account of the world economic downturn. The government had realised about Rs.48,000 crore through disinvestment during the three financial years 2009-10 to 2011-12.
Mr. Mukherjee categorically stated that no fresh proposal for disinvestment in defence production was under consideration, except for the two already listed. “There is no question of it either in the atomic sector or in the NICL,” Mr. Mukherjee said.
He, however, disclosed that the government was considering proposals for disinvestment in the petroleum sector. But the government would not dispose of its valuable assets in the current volatile market.
He stressed that the government holding would under no circumstances be brought below 51 per cent and that the Group of Ministers under him was in consultation with all stakeholders to decide on crucial issues, including the level of percentage the government should hold in any unit.