NOT BACK IN THE BLACK It's not clear if the Supreme Court will be satisfied with finance minister Pranab Mukherjee's explanation as to why the government cannot reveal the names of Indians who have money stashed away in Swiss banks—Tuesday's press conference was called in response to the Court giving the government a mouthful on the subject. The government told the Court international treaties forbade it from revealing the names.
At Tuesday's press meet, the FM detailed what the government had done in the matter. It had initiated the process of negotiations with 65 countries so that India could get details of banking transactions; 8 more income tax units had been set up overseas; taxmen working on transfer pricing had been trained better—within a short period, the FM said, adjustments worth Rs 45,000 crore had been made in import and export transactions, and Rs 33,800 crore of additional taxes collected. Some of this shows new determination and some looked like the old stuff being trotted out again—the best example of the latter, of course, is the setting up of a new multi-disciplinary committee to estimate the size of the black economy and the addition to it each year. Instead of just taking the government's word that it is going to get at the black money, let's examine its record. As compared to its projected tax collections of Rs 7,47,000 crore in 2010-11, tax arrears add up to Rs 1,17,000 crore.
These are amounts owed by persons the government knows the names of, and none of them are protected by any tax treaty; these are amounts where the income tax demand has already been raised; Rs 46,000 crore of this is not even under any form of dispute; around Rs 29,000 crore has been due for more than 5 years. Or take the celebrated VDIS amnesty scheme in 1997—as against the 35% tax to be paid, enough loopholes were left to allow people to pay 5-10% tax and get away, but no action ever got taken against officials who allowed this; Lalu Prasad and Mayawati were prosecuted for their black money but the cases never moved forward. In the latest 2G scam, if there is no revenue loss, as the government says, the case has lost much of its sting. Mauritius has long been seen as an entry point for India's black money to come back tax-free, but little has been done about it all these years …
Why are we so focused only on money stashed abroad?
