While the Union budget disappointed those hoping for an amnesty scheme for black money transactions, top North Block officials virtually ruled out any such plan in the future.
At their customary post-budget news conference, the officials, led by Finance Secretary Sushma Nath, cited three reasons for not considering the scheme as such a good idea. First, the returns from such initiatives had been modest historically. Second, international anti-money laundering bodies frowned on granting amnesty to defaulters. And third, the government was taking measures to improve intelligence on trans-national money flows.
Upgrading skills
Revenue Secretary Sunil Mitra pointed out that the government's strategy was to upgrade the skills of sleuths and strengthen the anti-money laundering mechanism. The strength of the Enforcement Directorate was being tripled with a two-fold increase in the number of officers. Tax Information Exchange Agreements (TIEAs) and double taxation avoidance agreements (DTAAs) with other countries were either being revised or negotiated. “We have finalised or are finalising 11 TIEAs and 23 DTAAs. We have to change 65 DTAAs.”
Mr. Mitra also pointed out that India was a member of the Financial Action Task Force (FATF), the Task Force on Financial Integrity and Economic Development, the Eurasian Group and the Global Forum on Transparency and Exchange of Information. All these organisations discouraged any amnesty scheme since such initiatives would send out the signal that the government was rewarding those on the wrong side of law.
He did not want the relief given to companies whose overseas subsidiaries do not bring in the dividend income earned abroad.
The officials also referred to the G-20 meeting in 2009, in which India was a leading participant. It resolved to clamp down on illicit financial fund flows through other means. There were also issues relating to secrecy in banking laws.
