Interview on black money- How to bring back the 500 billion dollars
New Delhi, Feb 10: Every Indian would hope that the black money stashed away abroad by the high and mighty is brought. A lower estimate would show that there is 500 billion dollars stashed away abroad.
What does the Indian government need to do now? What about the rubies, diamonds and gold worth several trillions of dollars which is stashed away abroad?
Dr R Vaidyanathan, professor of finance with the Indian Institute of Management, Bangalore speaks with OneIndia News about the black money issue. Dr Vaidyanathan who has also written one of the most comprehensive paper on black money says that in the next few months, the government will have to pass an ordinance to bring black money money back.
We have data and figures. What should be the next course of action on black money?
Now it is time for the government to issue an ordinance. Both houses of Parliament should pass this ordinance and once it is approved by the President of India, it should be used to bring black money back.
Once such an ordinance is issued it can be taken to those countries where Indians have stashed away black money. Those countries will have to abide by our request since we would have an ordinance.
There is a claim that all money is not black money. How does one handle the legitimate funds that are stashed away abroad?
Yes I agree that all money stashed away abroad is not illegal. The first step would be to bring back all the money whether legal or illegal. Once it is brought back, those who claim that the money is legal should be accorded an opportunity to prove the same.
If the money is genuine then it will not take more than a day for the person to prove that. However, if the person does not come forward or is unable to prove it, then the government should take over that money.
What about money in banks deposited by the Non Resident Indians?
The whole issue of NRI money should be revisited. It all started in the 1960s because India there was a scarcity of foreign exchance.
I feel that this concept should be abolished and Indians earning anywhere in the world should pay tax to the Indian government. This could be easily implemented in countries where we have a double taxation treaty.
Should depositing foreign currency be encouraged in Indian banks?
Yes it should be encouraged. This would ensure that the money remains in India and does not go out of the country. This would also help ensure that the money does not go out of the country and in turn our foreign exchange will swell.
What is your estimate? How must black money is there abroad?
My lower estimate is that there could be around 500 billion US dollars stashed away abroad.
Is it just money or are valuable too stashed away abroad?
That is correct. It is not just money that is stashed away abroad. There are plenty of diamonds, pearls and rubies which have been parked in safe deposit lockers abroad. Only God could estimate the value of that. It would easily run into trillions of dollars.
Many of the old timers especially in the royal families have stashed away their gold and other valuables in foreign banks. There is a need to bring that back too and that can be achieved only by arm twisting the country where all this is deposited.
Will the government take the black money issue to its logical end?
A great deal of pressure is mounting on the government over this issue. The government knows that this is a primary issue for every Indian. As the popular saying goes, " the reasons for success could become the reason for failures."
Black money will be an issue in every election and the government knows it. I feel that an ordinance will be passed in the next few months.