Jaya hits out at FM for 'economic terrorism'

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Chennai, May 29: Lambasting the Centre for turning a blind eye to ''economic terrorism'', AIADMK supremo J Jayalalithaa today questioned Union Finance Minister P Chidambaram about the steps taken to ensure that slush funds from the country and terrorist funds from abroad were not entering the Indian market through participatory notes.

''The Government of India is well aware that terrorists are parking funds in Indian ventures. Yet, the Finance Ministry has done nothing about the system of P-notes, which gives terrorists the additional benefit of anonymity while making hefty investments in the Indian market, which could later be used to fund terror activities against India,'' she said in a statement here.

Ms Jayalalithaa wondered what prevented Mr Chidambaram from invoking the provisions of the Benami Transactions (Prohibition) Act, 1988, to insist that all P-notes transactions were genuine and legitimate and making sure that no Indian was re-routing investments through P-notes.

''These are more important to the Indian economy and security...

Mr Chidambaram has to do something tangible about these issues,'' she said, adding otherwise, it would be presumed that had some vested interest in jeopardising the country's security.

Stating that ''unbridled inflation and equally unbridled acts of wanton terrorism'' have shaken the country in recent months, the AIADMK leader said ''there is a common thread linking these two problems - a spectre called economic terrorism'' and accused the Centre of sacrificing national interest to cling on to power.

Citing measures taken by the US and the UK post-terrorist attacks in those nations, Ms Jayalalithaa said consequently, no fresh incidents of terrorism were reported there and international terrorist outfits, unable to hit at the US, turned to softer pro-American targets like India. Though, terrorist acts were taking place with monotonous regularity across India, the Centre had abrogated the Prevention of Terrorism Act (POTA), 2002 and opened the doors to unchecked entry of funds from abroad in the name of globalisation, enabling terrorist outfits to not only fund terrorism in India, but also cripple the country economically, she claimed.

Ms Jayalalithaa said while an Indian had to provide a lot of document proof to open even a savings bank account, foreign investors could hide their identity under a sub-account by making use of P-notes to route their investments.

Though, SEBI, concerned about the possibility of influx of large quantities of terrorist funds into India, had asked the FIIs to disclose the identities of P-notes holders, there was no compliance. The Union Finance Ministry too had done nothing about this, she underlined.

She claimed the controversial Indo-Mauritius Double Taxation Avoidance Treaty (DTAT), 1983, had entailed tax losses of Rs 4,000 crore to India as it barred taxation for a resident of Mauritius on capital gains arising out of sale of securities in India.

The RBI felt that Indian slush funds were going out of the country and being ploughed back as legitimate funds via Mauritius, she added.


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