Global Financial Integrity, an advisory and advocacy organisation, based in the U.S. has released a report which reveals that India was subjected to the entry of an assessed amount of USD $770 billion as black money during 2005-14.
Let's have a look!
During the similar period of 10 years for which the international watchdog has reported that $770 billion of black money entered India, they have also claimed that around USD $165 billion went outside of the country in the form of illegal money.
The mission statement of Global Financial Integrity reads, "Global Financial Integrity works to curtail illicit financial flows by producing groundbreaking research, promoting pragmatic policy solutions, and advising governments."
This report from GFI is bound to stir an enormous political debate as the current central government lead by Prime Minister Narendra Modi has brought the issue of corruption by the UPA government again and again into the limelight.
The report shares the details about the black money exchanges that took place in a year wise split. In 2014 alone, around $23 billion USD exited the Indian market and nearly $101 billion USD entered in our nation as black money.
Cristine Clough, a Program Manager at GFI, said, "Illicit Financial Flows to and from Developing Countries: 2005-2014," the report is the first global study at GFI to emphasise illicit outflows and inflows equally. Each is found to have remained persistently high over the period between 2005 and 2014. Combined, on an average, these outflows and inflows are estimated to account from 14.1 and 24.0 percent of developing country's trade.
"The order of magnitude of these estimates, much more so than their exactitude, warrants serious attention in both the developing countries and the wealthier world," said GFI President Raymond Baker, a longtime authority on financial opacity.
He adds further that, "years of experience with businesses and governments in the developing world have taught us that the decision to bring illicit flows into a particular developing country often marks only the first phase of a strategy to subsequently move funds out of the country. Together, illegal inflows and outflows sap the crucial financial resources needed to reach the Sustainable Development Goals."
The report suggests that the governments come up with public registries to account for verifying beneficial ownership information to keep a check on the black money in the country. It confirmed profitable ownership information to keep a note on the black money in the country. It should be applied to all the judicial entities and should be implemented to all the legal entities.
The report also suggests that "policymakers should require multinational companies to publicly disclose their revenues, profits, losses, sales, taxes paid, subsidiaries, and staff levels on a country-by-country basis."
Indian economy has been suffering for long now with the issue of black money. This report stirs up the debate once again on how to counter the adverse effects of this humongous problem. It raises a serious question, as is there any possible way to end the black money?
The government's response is still awaited, and it will be interesting to find out how this issue will be dealt from both the sides.
That's all, folks!