Black money issue has become a political agenda in India and the promise to bring back trillions of dollars stashed in foreign banks has helped the Bharatiya Janata Party (BJP) to increase its credibility and outreach among people. While accusing the previous UPA government of not being serious on the issue of black money, Prime Minister Narendra Modi promised to get back every penny stashed abroad. The Prime Minister has said that bringing back black money from outside the country is an "article of faith" for him and nothing will be lacking in his efforts to do so.
We do not have any authentic source to quantify black money stashed in foreign banks. However, several studies including one done by Indian Institute of Finance estimate it is around $ 2 trillion.
HSBC Issue
Couple of days back a fresh list was out. The government has given an assurance that the IT department will probe all new cases. The department is reportedly in touch with a whistle blower to get the names of all the undisclosed Indian accounts in HSBC’s Switzerland branch and other destinations. Just after the release of the list, Finance Minister Arun Jaitley said that information in more than 600 cases has been sought from foreign jurisdictions. A recent media report had said that the fresh HSBC list contains 1,195 Indian names, which is nearly double the 628 names that figured in an earlier list that was shared by the French government with India in 2011.
Modi government has claimed that it is taking black money issue, both foreign and domestic, very seriously. The Supreme Court’s positive reactions to the working of the SIT indicates that the government is on the right track. So far, nearly 500 people have accepted that they have stashed money in foreign banks without the knowledge of the government.
Government’s initiatives
- Departure from the previous UPA government’s reluctance to set up SIT even after the Supreme Court had asked to do so.
- Modi government constituted the SIT within two-and- a-half days of forming the government.
- The government is well aware that all money stashed in foreign banks is not black and there is a need to investigate each case properly. Moreover, disclosing names of the account holders in foreign banks violates the confidentially clause in treaties with other countries.
- With a fresh list of account holders making waves, the SIT is considering all old and new cases and efforts are being made to complete the probe by 31 March.
- A delegation led by Shaktikanta Das, Revenue Secretary had visited Switzerland on 15 October last year and held discussions with the Swiss Finance and Tax Authorities on issues relating to Exchange of Information in tax matters. Switzerland has indicated willingness to provide information in respect of cases where investigations have been carried out by the IT Department independently from what Swiss Government considers as stolen data.
- The Swiss Federal Tax Administration has agreed that their competent authority would assist India in obtaining confirmation of genuineness of bank documents on requests by the Indian side and also swiftly provide information on requests relating to non-banking information.
- Switzerland has also assured that they would commence talks with India for concluding an Automatic Exchange of Information (AEOI) Agreement between India and Switzerland at the earliest, after completion of their domestic procedures. This is the first time that Switzerland has agreed to commence discussions on a bilateral agreement on AEOI.
