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ONE MORE REASON TO VOTE FOR --- BJPViews: 1126
Apr 08, 2009 6:02 pmONE MORE REASON TO VOTE FOR --- BJP#

sanjay jain
Indian money stashed in the Swiss Bank has become a focal point of debate, especially after the Leader of Opposition and the Bharatiya Janata Party's prime ministerial candidate L K Advani raised the issue on Sunday. If elected, the BJP has vowed to bring the black money back home. Though the Congress dismissed the idea, the Swiss bank issue is slowly becoming a hot election issue.

In fact the BJP also plans to carry out a mock election across the country on April 6 where people will have to cast their vote indicating whether Indian money in Swiss banks should be brought back to India or not.

During his address, Advani said the BJP will form a task force comprising experts to prepare a strategic document for India to recommend ways to get back the national wealth stashed away illegally by corrupt politicians, businessmen and criminal overlords.

One of the names he mentioned in the task force is Professor R Vaidyanathan, Professor of Finance at the Indian Institute of Management, Bengaluru.

In this exclusive interview to rediff.com's Vicky Nanjappa, Vaidyanathan explains in detail the importance of bringing back the ill-gotten wealth and how the money got there in the first place.

Firstly how much Indian money do you think is stashed away in the Swiss Banks?

In 2006, the most recent Global Financial Integrity study, developing countries lost an estimated $858.6 billion (about Rs 43 lakh crore) to $1.06 trillion (abot Rs 51 lakh crore) in illicit financial outflows. Even at the lower end of the range of estimates, the volume of illicit financial flows coming out of developing countries increased at a compound rate of 18.2 percent over the five-year period analysed for the study. On average, for the five-year period of this study, Asia accounts for approximately 50 percent of overall illicit financial flows from all developing countries.

This report shows that the average amount stashed away from India annually during 2002-06 is $27.3 billion (about 136,466 crore). It means that during the five-year period the amount stashed away is 27.3x5=136.5 billion (about 692,328 crore). It is not that all these amounts went to Swiss banks. It has gone to different tax and secret shelters. The share of Swiss banks in dirty money being a third of the global aggregate, some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks.

The important point is that this is only for five years. More amounts were stashed away during the Nehruvian regime. So the loot for 55 years will be several times higher. In fact, in those days the rupee commanded a better value per dollar. So fewer rupee could get more dollars. So the estimation that the Indian money stashed away may be of the order of $1.4 trillion (about Rs 71 lakh crore).

On what basis have you come to this conclusion?

There is a lot of literature available as to how to estimate the illicit financial flow from developing countries. We find out what the nature of the flow is. I have also relied upon the study Illicit Financial Flows from Developing Countries: 2002-2006 Global Finanacial Intergrity authored by Dev Kar and Devon-Cartwright Smith, a project of the Ford Foundation. Financial flows in the context of this report includes the proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of ilicit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade taxes).

Which are the various tax havens, where the ill-gotten wealth of Indian businessmen and politicians are stashed?

There are presumably more than 70 tax havens in the world. Indian wealth could be more in Switzerland and various British /US islands. At least 40 countries market themselves aggressively as tax havens [Source: Internal Revenue Service USA on Abusive Off-shore Tax Avoidance schemes Talking Points Jan 2008]. The well-known tax havens are Switzerland/ Liechtenstein/Luxemburg/ ChannelIslandsetc.

Could you elaborate and tell us how the money got there in the first place?

There are several methods/reasons. Under invoicing/over invoicing of exports and imports and getting the balance stored abroad. Kickbacks from major defense/civilian contracts. Not bringing the earnings abroad. In the old days smuggling of gold and illegal money. Transactions done abroad and not reported here. Hawala funds. Funds earned by artists/ entertainment industry /sports people and stashed abroad. When you want to indulge in adharma, hundreds of ways are open!

We would like to know the terror connection. Do you think even terrorists are stashing away cash and using the tax haven route to send across money all over the world, to finance their activities?

M K Narayanan, our National Security Advisor, has spoken about it in Berlin recently.

Advani says that it is important to bring this money back. How can the government go about it and what are the various ways in which India can get its money back?

Put it on the Global Agenda. Put it in G-20. Put it in the International Monetary Fund. Put it in Egmont Group. Also take a lead among all developing countries. Support US /German/French efforts.

If India decides to take the initiative, will the Swiss authorities cooperate?

It is not due to our pressure but that of US which will make them co-operate. When a family is in deep financial crisis then it tries to look at the small amount saved under the sugar jar by grandma. Same way developed economies are desperate for every dollar. Even if we do not act due to their efforts the list of crooks may be out, then we will be in a dangerous social situation since the who's who of India will be there. Instead we should get it and get the funds and decide on the steps to sterilise it. Otherwise, the world will laugh at us.

Politicians sure must be having a lot of money in Swiss Banks. Do you think this factor will deter the government from acting?

Public pressure will make them do it. Plus, the evolving global situation against tax havens. The money belongs to the poor farmers and unorganised workers of India. Also, Indian businessmen have a lot of their ill-gotten gains in these banks. The world situation is such that Indian businessman will want to bring it back now given the attractive returns in India.

Do you think that the Indian government should demand all the Indian black money in Swiss banks?

Of course. India should and must act. We are not a banana republic.

You wrote in your column that the German foreign intelligence agency BND got names of 1,400 clients of the Liechtenstein-based LTG bank who were supposed to be suspected tax evaders. Of the 1,400, 600 were supposed to be Germans. Do you think of the remaining there will be Indians as well? Has the Indian government approached the German government for the list?

Indian names will be there. Our tax evaders and crooks are like the omnipresent Maha Vishnu present in all continents and all tax havens. But our government has been lukewarm in this issue. It should have despatched immediately senior officials to get the names.

Isn't it important to tackle the issue of domestic black money?

It is definitely important. At least the domestic black money is used in our economy and to that extent it is productive. But the money kept in Swiss banks is neither useful to India nor does it benefit Indians.

What role should the media play?

The media has a very important role to play. At the moment it seems like most part of the media is more interested in the diet of an actress. Pressure by the media needs to be built up on this issue and remember that a lot of Indians don't just go to Switzerland to ski.

What about the names of these persons?
India must try and get the names. But more importantly should get the money back. It should be top on the agenda and India ought to take a moral lead in this issue.

Will the Indian economy improve if the money is brought back?

It will do phenomenally. India will be in the top five league if all the ill-gotten money is brought back. It will change the Indian scenario and I have been saying this since 1993.

Do you think that these people will now try and pull out the money since this issue has become a hot topic?

I don't think so. If they do then India should create an instrument and regulate frameworks to bring the money back.

What kind of punishment do you suggest for these persons?

Punishment is not the issue now. There is a need to create fear in them and follow what the international community does on this issue.

Lastly do you think this is becoming just another election issue?

The US and Germany took the lead and there is no election there. We should not treat this as an election issue. We have to take up this matter and if we don't then we will become a laughing stock of the entire world.

Private Reply to sanjay jain

Apr 09, 2009 10:45 amre: ONE MORE REASON TO VOTE FOR --- BJP#

subhash mohanti
This subject of stashed away ill-gotten funds in Swiss banks is a long debated which has never ever produced any results other than being made election issues at the time of National Hustings. It would be presumptuous to say that only die-hard Congressmen and their sympathisers are the ones guilty of such conduct. This is not to say that one should therefore close one's eyes to such a menace. But what good is it to declare that BJP will swing into action the moment they are voted back to power. BJP did rule this country before and one can be reasonably sure that Swiss bank coffers were being filled up then too.
The fact is politicians are birds of same feather and certainly fair weather friends. I doubt if any of these guys have even an iorta of good in their hearts for the country. If that was so, then they should have been concentrating on builidng both social and human infrastructure of this country regardless of who was in power. There is no stopping politicians of different hues to come togther on issues of National relevance, especially issues that directly affect human lives.
Elections will come and elections will go. What matters is who has the balls to de-criminalise politics and political administration. These unsatiated hungry humbugs must discard their personal agenda and dare to look at issues that influence nation building. Till then we shall be engaged in baseless debates over who is a bigger crook.

Private Reply to subhash mohanti

Apr 09, 2009 2:06 pmre: re: ONE MORE REASON TO VOTE FOR --- BJP#

sanjay jain

sir you are right dont you think left parties should have forced this issue instead of withdrwaing support as election came near they withdrew

all in red colour are just few comrades who talk about poor people but do not act in their interest in fact no body acts for theme

just vote for issues n candiate not on paryty lines

Private Reply to sanjay jain

Apr 10, 2009 3:57 amre: ONE MORE REASON TO VOTE FOR --- BJP#

Ernie Martin
I am curious: Issues such as housing shortage in cities; unemployment; growing the economy; educating the poor; sanitation in cosmopolitan; population control; improving the infrastructure rails/transportation and roads; medical care; international affairs; etc, which party or alliance parties would best serve India?

Cheers,

Ernie Martin

Get Control of Your Finances
http://www.moredebtfreedom.com
Positive Living and Belief Systems Network Co-Moderator
http://positivelivingandbeliefsystems-network.ryze.com/

Private Reply to Ernie Martin

Apr 14, 2009 7:00 pmre: re: ONE MORE REASON TO VOTE FOR --- BJP#

Savita Govilkar
We must thank all the politicians and corrupt industrialists for saving this money in Swiss Bank. It may come handy at this hour of downturn for India.If they had kept in old style diamonds and gold we would have never discovered the same.

Private Reply to Savita Govilkar

Apr 16, 2009 3:51 amre: re: re: ONE MORE REASON TO VOTE FOR --- BJP#

sanjay jain

thats very cheeky comment, all politicians are not women

read on nukkad doing ccp of same

Encyclopedia of Congress Interpretation!

Sikhs getting slaughered in thousands = A MISTAKE.
Hindus getting killed in Kashmir = Political problem.
Muslims getting killed by a few hundred = Holocaust.
Poor protestors getting shot in WB under Left Govt = Misunderstanding.

Banning Parzania in Gujarat = Communal.
Banning Da Vinci Code and Jo Bole So Nihaal = Secular.

Kargil Attack = Government failure.
Chinese invasion in 1962 = Unfortunate betrayal.

Reservations in every school and college on caste lines = Secular. Reservations in Minority institutions = Communal.

Encounter in Gujarat [Sohrabuddin] = BJP Communalism.
Fake encounters under Cong-NCP in Maharashtra [Khwaja Younus] & Batla House Encounter in Delhi = Police atrocity.

Talking about Hindus and Hinduism appeasment = Communal. Talking about Muslims and Islam = Secular.

BJP freeing 3 terrorists to save 100 Indian hostages = Shameful
Congress & Janata Dal freeing 4 militants to save just a life of one daughter of its minister in Kashmir [Rubina Sayed] = Natural Political dilemma.

Attack on Parliament = BJP ineptitude.
Not hanging Afzal Guru the mastermind despite Supreme Court orders = Humanity and Political dilemma.

BJP questioning Islam = Communal.
Congress questioning Lord Rama existance = Clerical Error.

Private Reply to sanjay jain

Apr 16, 2009 5:15 pmre: re: re: re: ONE MORE REASON TO VOTE FOR --- BJP#

Savita Govilkar
Imagine women politicians probably did both. Swiss Bank and Gold/Diamonds...

Private Reply to Savita Govilkar

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