Rich Indians stash illegal $500bn abroad

Rich Indians have stashed away almost $500-billion of illicit money abroad, parking the funds in countries considered the “least corrupt”, the country’s top police agency said on Monday.

The issue of so-called “black money” has been a major political headache for India’s government, which has faced pressure from corruption activists and political opponents to do more to claw back money held abroad.

“It is estimated that around $500-billion of illegal money belonging to Indians is deposited in tax havens abroad,” AP Singh, director of the Central Bureau of Investigation (CBI), told an Interpol conference in New Delhi.

Singh said the countries rated as least corrupt by Transparency International, a global anti-graft watchdog, turned out to be the ones where “most of the corrupt money goes”.

“The tax havens include New Zealand, which is ranked as the least corrupt country, Singapore ranked number five and Switzerland number seven,” he said, according to the Press Trust of India.

Tax evaders
The CBI chief said that international agreements and other legal hurdles prevented the Indian government from exposing the identity of the tax evaders and bringing the wealth back to the country.

“There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty but there are also language barriers and a lack of trust when working with other countries,” Singh said.

Heaping further embarrassment on the beleaguered Congress-led government, India’s Supreme Court last year accused it of being reluctant to publish details about untaxed money held in overseas bank accounts.

Singh said criminals were using territorial restrictions of investigating agencies to their advantage and spreading their crime to at least two countries before investing in a third.

“For criminals all it involves is setting up of a few shell companies and then making layered transfers from account to another in a matter of hours as there are no boundaries in banking transactions,” he said.

Think-tank
The World Bank pegs the cross-border flow of money from criminal activities and tax evasion at around $1.5-trillion, of which $40-billion is in bribes paid to government servants in developing countries, according to Singh.

ASSOCHAM, a prominent Indian trade body and think-tank, recently suggested that the government provide a window to tax evaders to disclose their assets parked abroad in exchange for amnesty.

Those making such disclosures would have to pay half the amount as taxes to the Indian government.

“The fact remains that as on date it may not be possible to get hold of these persons who have stashed money abroad that is why the scheme is an invitation to these people to come forward and pay taxes,” it said in a report. — AFP

We make it make sense

If this story helped you navigate your world, subscribe to the M&G today for just R30 for the first three months

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.”

Abhaya Srivastava
Abhaya Srivastava is Agence France Presses South Asia special correspondent.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

Just transition could secure access to cleaner energy sources in...

A researcher says Africa’s huge renewable energy potential could save lives from air pollution

South African entrepreneur seeks to turn caterpillars into tasty snacks

For many people, particularly from western European backgrounds, the idea of eating insects is still riddled with fear and inhibition

No shucks given at the Knysna Oyster Festival

The world of Knysna’s shores is everyone’s oyster this week. There is something for everyone: arts; entertainment; trail running; wining and dining; and chocolate making

Plasma gangs: How South Africans’ fears about crime created an...

A tale of criminality, magic, violence and fear offered a way to foreground the contradictions that come with living in a township
Advertising

press releases

Loading latest Press Releases…
×