Prime Minister Manmohan Singh asked Finance Minister Pranab Mukherjee on Thursday to hold a detailed press conference “at the earliest” to clarify the government's position on the black money issue and what it was doing to deal with the menace.
On Wednesday, the Supreme Court sought clarity from the government on how it intended to end black money, and wanted to know why it could not reveal the names of people who had stashed away huge sums in foreign banks. This has added fuel to the sustained criticism of the government by the Opposition as well as the rash of reports in the media, together creating the impression that the government has something to hide.
The matter came up at Thursday's Cabinet meeting during a discussion on a proposed tax agreement with the Cayman Islands. The Prime Minister himself raised the subject and expressed concern at the government taking a beating on black money.
Dr. Singh then asked Mr. Mukherjee about the progress on the issue, sources said.
Later, Dr. Singh asked Mr. Mukherjee to also find out from Solicitor-General Gopal Subramaniam whether the court's observations were a result of the government's counsel failing to put across its case effectively or whether they just emerged from the Bench.
‘Won't publish names'
Sources said that Mr. Mukherjee told the Cabinet that the government had received information about black money accounts in foreign banks on the basis of international treaties that it had signed, and that if such information was made public, no government would share such details in the future.
He stressed that foreign governments had shared this information purely for taxation purposes, and the government intended to honour that provision and not make public the names of the account holders.
Mr. Mukherjee added that if the court so wished, it could reveal the names, as they had been given to the court. Indeed, Mr. Subramaniam had furnished in a sealed envelope a list of 26 persons who had accounts with the Liechtenstein Bank.
Revisiting bilateral agreements
Now the government is in the process of revisiting bilateral agreements with countries that are tax havens to include a provision so that it can secure information on accounts opened by Indian citizens over there. It is learnt that some have already been signed and some are in the works.
Much of what Mr. Mukherjee told the Cabinet was what Dr. Singh himself told journalists immediately after Wednesday's swearing-in ceremony at the Rashtrapati Bhavan.
Responding to a question on the court's observations, the Prime Minister said that while he did not know what the court had observed, there was “no instant solution to bringing back black money.”
“We have got some information from one location and that has been provided to us for the collection of due taxes. We cannot use that information for any other purpose and that information cannot be made public,” he said, as the government had made a commitment not to reveal such information. These were treaty obligations, he stressed, adding: “Otherwise, who will respect us?”
