Union Finance Minister Pranab Mukherjee today tabled a White Paper on black money in Parliament. The objective of the White Paper is to place in the public domain various facets and dimensions of black money and its complex relationship with the policy and administrative regime in the country.
The paper also presents the framework, policy options and strategies that the Government of India has been pursuing to tackle this issue, especially recent initiatives and developments.
The paper is expected to contribute to the ongoing debate on the issue of black money and help develop a broad political consensus regarding the future course of action to address it.
In the White Paper, Mr. Mukherjee said there was no doubt that manifestation of black money in social, economic and political space of our lives has a debilitating effect on the institutions of governance and conduct of public policy in the country. Governance failure and corruption in the system affect the poor disproportionately.
He said the success of an inclusive development strategy critically depends on the capacity of our society to root out the evil of corruption and black money from its very foundations.
The Finance Minister also said that the endeavour in this regard requires a speedy transition towards a more transparent and result oriented economic management systems in India.
The White Paper said that money deposited by Indians in Swiss Banks came down from Rs 23,373 crore in 2006 to Rs 9,295 crore in 2010. It also said that black money in Swiss accounts has reduced by Rs 1,4078 crore during 2006-2010.
The paper said with increasing realisation about the harmful effect of ownership being concealed behind complicated corporate ownership structure, such structure was coming under scrutiny.
The Finance Minister said in the Indian context, it was one of the reasons for the fact that tax authorities were not able to take action in cases where money was prima facie brought back to India through round tripping and other legitimate means and it is expected that efforts taken by India in this regard as also global pressure will provide a check on these tendencies.
Pranab said last year the Government brought five Bills namely the Lokpal Bill, the Judicial Accountability Bill, the Whistle Blowers Bill, the Grievance Redressal Bill and the Public Procurement Bill, which are at various stages of consideration by the Parliament.
India has consistently taken the stand against structuring of transactions through tax havens by creating a complex chain of subsidiaries for avoidance of taxes.
The white paper said Indian tax administration has always been of the view that foreign investors in India should pay taxes on their income either in India or the country of their residence, and does not endorse attempts to avoid taxes in both the countries by use of such opaque tax-avoidance structures.
The legislative measures included in the Finance Bill 2012 and the introduction of GAAR can create necessary deterrence against such structuring and thereby plug this loophole for tax evasion.
Meanwhile, the BJP today the White Paper as an empty paper. Talking to reporters outside Parliament, senior Party leader M Venkaiah Naidu said the quantum of black money stashed in foreign banks had not been disclosed in the document. He said there was neither the mention of names of the people having black money nor any action proposed to take action to bring back the money from abroad.
