Need to temper expectations

Updated - November 17, 2021 02:09 am IST

Published - February 14, 2015 01:24 am IST

Fresh revelations about the existence of a list of 1,195 Indians with accounts in a bank in Switzerland, estimated to contain funds to the tune of Rs.25,420 crore, has escalated the pressure on the government to make renewed efforts to trace unaccounted money stashed away abroad. There is little doubt that the probe will now have to be widened to take the new disclosures into account. However, the publication of the list by an international consortium of investigative journalists may not automatically mean that all these accounts are illegal or that the funds in them are tainted. That some prominent industrialists and other individuals have found a place in this ‘black’ list is cause for some excitement, but should not give rise to heightened anticipation that the country is closer than before to bringing home wealth hoarded away in safe havens. In the public imagination, the archetypal holder of a Swiss bank account is the businessman who parks money in a jurisdiction famed for its banking secrecy, or the political leader hiding corruption-tainted cash. It is not known how many of those >named in the fresh list of offshore accounts said to be held by Indian nationals in HSBC’s banking arm in Switzerland fall under either of these categories. Some of them have denied that they had any illegal accounts or that they had any overseas bank account at all.

The need, as pointed out rightly by Finance Minister Arun Jaitley, is not for names, but hard evidence to show that these accounts held black money. These accounts will have to be scrutinised first to assess whether its holders were entitled to operate them, whether the money was legitimately acquired and liable to be taxed in India. After scrutiny of an earlier list of 628, the government found that 428 of them were actionable, and there were 128 orders of assessment. It has launched prosecutions in 60 cases for wilful tax evasion. The process ought to be completed by March 31 this year. These numbers provide some perspective on the mammoth task at hand, and the clear absence of any shortcuts. Expectations arising from these disclosures will have to be tempered. The government will do well to continue efforts to act on the suggestion by the Special Investigation Team that treaties signed with other countries to curb black money be renegotiated. The Attorney General has also spoken about new legislative measures on the treatment of unaccounted money abroad. Even while strengthening transborder measures to check tax evasion, domestic laws also require amendments to curb the menace. Dealing with the black economy is a complex issue that involves managing jurisdictions where confidentiality is the norm, and negotiating an exchange of information based on an applicable legal framework.

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