India suffers $ 21 billion black money outflow, reveals global financial watchdog
In what can be seen as a major backing for the need for hard steps taken by the Indian government required to stem the flow of black money in and out of the country, report from an international watchdog said that over 21 billion dollars worth of black money was taken out of the country in 2014.
The Narendra Modi led government, which came to power in 2014 on the promise of bringing back black money hoarded outside the country and providing a corruption free India and Government, had announced a slew of measures to clean up black money from the economy.
These include, the recent demonetisation exercise, treaties with foreign governments to exchange bank account details of their citizens in the other country, a push towards transactions done through digital mode, clearer trade deals with other countries, among others.
But now with the numbers related to the inflow and outflow of black money from the country coming out, the picture of the size and scale of the struggle and the need for further steps, to fulfil the promises made before and after elections is getting clearer.
More so, as experts reportedly have still called these numbers conservative.
According to the reports of Global Financial Integrity (GFI), a global financial watchdog, the illicit outflow of money was nearly 19 per cent more than the previous year. And the figures of equally damaging inflow of illegal funds, show the country being the destination of 101 billion dollars in 2014, an increase of nearly 11 per cent from the previous year.
The inclusion of Swiss data on gold exports, which was not a part of estimates earlier, has led to a major revision of estimates of inflow and outflow for India.
While talking to a leading national daily, one of the authors of the report, Joseph Spanjers, is reported to have said that due to India's large imports of gold from Switzerland, rectifying this data issue significantly closed observed bilateral trade gaps between the two countries.
The report estimates that funds anywhere between 620 to 970 billion dollars were drained out of the developing world, with trade fraud being the main tool. While inflows were estimated to be in the 1.4-2.5 trillion dollar range. Combined inflows and outflows from the developing world, accounted for 14 to 24 per cent of total developing country trade over the 2014-2015 period.
GFI, also recommended a slew of measures that can be taken to check such illicit transactions. These include, a better trained and equipped customs staff and stricter scrutiny of trade deals, along with global cooperation in exchanging information on bank accounts, especially in tax havens.