New Delhi: India is among the top 10 developing countries in the world with a black money outflow of $1.6 billion (Rs. 8,720 crore) in 2010, a report by Global Financial Integrity (GFI) said. The report, to be released on on December 18, said the total outflow of black money from India since independence until 2010 was $232 billion, generally in the form of corruption, bribery and kickbacks. The cumulative value of illicit assets held by Indians during the same period is estimated to be $487 billion.
In the post-reform period of 1991-2008, deregulation and liberalization accelerated the outflow of illicit money from the Indian economy, the report by Washington-based GFI, Illicit Financial Flows from Developing Countries, said.
“Almost three-quarters of the illicit assets comprising India’s underground economy — which has been estimated to account for 50 percent of India’s GDP (around $640 billion in 2008) — ends up outside of the country,” the report’s author and former economist with IMF Dev Kar, said.
Maximum outflow of illicit money was from China with India ranked eighth.
Switzerland mulls new bill to check black money flow.
Often accused of providing safe havens to black money from India and other countries, Switzerland has proposed a new bill to prevent its banks and other institutions from accepting “untaxed assets” from their clients and put in place a stricter due diligence regime.
The move follows rising global pressure on Switzerland to act against its banks giving “safe haven” to overseas entities in name of client confidentiality.
In India as well, the issue of alleged hoarding of black money in Swiss banks has been a matter of political debate.
The Swiss Federal Council said in a statement that it “is stepping up its efforts to combat abuses in the area of money laundering and taxation.”