Soft on the black money trail

Will Switzerland share information on alleged black money stashed by Indians in its banks? Or not? India’s efforts to pierce the veil of deceit and secrecy that conceals the flow of black money have pivoted around three fronts: greater international cooperation, domestic laws and domestic institutions. But each has been characterised by more of processes and less of results. As India intensifies that search with a special investigation team (SIT), as instructed by the country’s highest court, John Samuel Raja D highlights four facets that have defined the government’s approach and efforts this far.

1 Domestic figures exceed international ones

In general, the authorities have recovered more black money — any amount liable for tax but not disclosed in India than from abroad. In domestic cases, it can take the form of, say, sales in cash and unaccounted for, fictitious expenses, inflating cost of fixed assets.



2 Greater international cooperation has not plugged loopholes

India is a signatory to several bilateral and multi-lateral agreements. But both sets exclude several tax havens. And even in the bilateral set, India is struggling to, for example, conclude renegotiation of its double tax avoidance treaty with Mauritius and the one with Switzerland is effective only from 2011.



3 Several crucial domestic laws are yet to be passed





4 Staff shortage

Every key monitoring and investigating body is understaffed and under-skilled, partly leading to a backlog of pending cases.