New Delhi, Jan 25 (PTI) Unfazed by opposition attacks andquestions from Supreme Court, Government today maintained thatit cannot disclose information received from foreign entitieson black money held by Indians abroad because of absence oflegal framework.
Finance Minister Pranab Mukherjee, however, dismissedopposition criticism that it was not disclosing informationbecause such disclosure could result in the government''s fall.
"Let us understand the issue. No information can be madeavailable unless there is a legal framework. No sovereigncountry is going to share information unless there is a legalframework," he told a press conference explaining the reasonswhy the government was not in a position to part withinformation it has obtained some foreign entities on blackmoney stashed away abroad.However, he said Double Taxation Avoidance Agreement(DTAA) and Exchange of Taxation Information Agreement are twoinstrumentalities under which information can obtained and thegovernment has already amended pacts with 23 countries to getinformation from banks.
"But the problem is information which we have obtainedhas come under some conditions of secrecy. Today, if wedisclose tomorrow other countries will not give me theinformation raising an accusing finger that you do not meetinternational commitments," he said.
However, Mukherjee said "there is a way. As and when theIncome Tax Authorities will be in a position to prosecutecases against tax evaders you will come to know".
"Even I have no intention or authority of knowing thenames (of those who have stashed black money abroad). TheIncome Tax officers have statutory powers under which theyperform their duties and they are outside the purview of theadministrative control of the ministry," Mukherjee said. MOREPTI NAB SKU CS MS AKK
New Delhi, Jan 25 (PTI) Finance Minister Pranab Mukherjeetoday said the Reserve Bank''s decision to hike short-termborrowing and lending rates will help contain inflation andwas in line with the government''s policy.
Welcoming the RBI decision to increase the repo andreverse repo rates (short-term borrowing and lending rates) by25 basis points each, Mukherjee said it was aimed at giving "astrong signal to tackle inflationary pressures".
"RBI has taken a decision very correctly to increase therepo rate and reverse repo rate," he added.
The Reserve Bank of India (RBI) also revised inflationtarget to 7 per cent by March-end, from 5.5 per cent projectedpreviously.The central bank retained the economic growth forecastat 8.5 per cent for the current fiscal with potential for anupward bias.
The RBI measures also include extending additionalliquidity support facility till April 8, 2011.
"Therefore the RBI policy announcement is in conformitywith the thinking and policy of the government," the financeminister said.
Mukherjee said the government has formulated a five pronged strategy comprising joining the global crusade against''black money''; creating an appropriate legislative framework;setting up institutions for dealing with illicit funds;developing systems for implementation; and imparting skills tothe manpower for effective action.
The Finance Minister said there were no reliableestimates of black money both inside and outside the country.
The interim recommendations of BJP Task Force 2009 haveestimated the amount of black money to be between USD 500billion to USD 1,400 billion, he said.
A recent study by Global Financial Integrity hasestimated the present value of illicit money outflow to be USD462 billion, he said."All these estimates are based on various unverifiableassumptions and approximations. Government has been seized ofthe matter and has constituted a multidisciplinary committeeto get studies conducted to estimate the quantum of illicitfund generated by Indian citizens," Mukherjee said.
On whether the government would come out with an amnestyscheme to bring back unaccounted money abroad, he said a grouphas been constituted to look into such possibility.
He said India has also initiated process of negotiationwith 65 countries to broaden the scope of article concerningExchange of Information to specifically allow for exchange ofbanking information and information regarding taxpayers notcovered by DTAA.
"Thirteen new DTAAs have also been finalised where theExchange of Information Article is in line with theinternational standards," the minister said.
He said the government was strengthening theadministrative machinery by setting up eight more income taxoverseas units.
Two such units are operational in Singapore andMauritius, Mukherjee said.
Government is also setting up an Exchange of Information(EoI) Cell, which will help in effective exchange ofinformation to curb tax evasion, he said.
"We have detected undisclosed income of about Rs 15,000crore in last 18 months, due to focused search operations bythe Income Tax Department," he said adding that during thesame period, Directorate of International Taxation hascollected taxes of Rs 34,601 crore.
"The Directorate of Transfer Pricing has detectedmispricing of Rs 33,784 crore, which has prevented shifting ofan equivalent amount of money outside India," he said.
Information regarding details of payments received byIndian citizens in several countries has started also comingfrom treaty partners. This information is in different stagesof processing and investigation, Mukherjee said. .
The Finance Minister said necessary provisions have been made in the proposed Direct Tax Code to create legislativeframework to check illicit outflows of funds.
India''s membership in Financial Action Task Force in Junelast year, was in recognition of the strength of the country''santi-money laundering and anti-tax evasion measures.
India has also joined the Task Force on FinancialIntegrity and Economic Development in order to bring greatertransparency and accountability in the financial system.
In June 2009, the Prevention of Money Laundering Act(PMLA) has been amended whereby the predicate offences listedin the Schedule to the Act were substantially increased interms of the Acts covered and sections covered under suchActs, Mukherjee said.
He said this amendment has tremendously widened thescope of money laundering investigations by the Directorate.
Mukherjee said the early results of the government''sinitiatives were encouraging.
"These proactive steps led to additional collection oftaxes of Rs 34,601 crore and detection of additional income ofRs 48,784 crore on which taxes are being collected. I amconfident that the results will be quite satisfactory in thedays to come," Mukherjee said.