Road accident deaths drop by 50% in Saudi Arabia    SR 3.95 million fines for 3 employees of a company and 6-month jail for one for violating Capital Market Law    Qassim emir launches 52 health projects costing a total of SR456 million    BD and INS partner to elevate standards of infusion care in MENAT    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    GASTAT: Passengers of public transport bus and train soar 176% and 33% respectively in 2023    Fakeeh Care Group reports 9M-2024 net profit of SR195.3 million, up 49% y-o-y driven by solid revenue growth and robust profitability    Italy's 'Libra' to arrive in Albania with just eight migrants on board    South Africa shuts border crossing with Mozambique over poll unrest    French families sue TikTok over harmful content that allegedly led to suicides    Harris tells supporters 'never give up' and urges peaceful transfer of power    HRT does not impact life expectancy — UK health body    Liam Payne's body to be flown back to the UK    Suspect arrested for banking fraud totaling SR493 million as Nazaha pursues corruption charges    Arab leaders and heads of state congratulate US President-elect Donald Trump    Neymar suffers muscle tear, out for 4-6 weeks    Crown Prince hails Saudi medical team that performed world's first fully robotic heart transplant    Al Nassr secures 5-1 victory over Al Ain to edge closer to knockout stage    Al Ahli extends perfect start with 5-1 victory over Al Shorta    Mitrovic's hat-trick leads Al Hilal to 3-0 victory over Esteghlal    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



India battles with illicit flow of funds
Published in Saudi Press Agency on 03 - 02 - 2011

Big Indian outflows of illicit funds have come into the spotlight with the country's top court criticising Prime Minister Manmohan Singh's failure to crack down on flows to Swiss banks and other tax havens, according to Reuters.
The government, under pressure from the opposition which is demanding a broad parliamentary investigation into a telecoms scam, is likely to face criticism on outflows in the next parliament session, beginning on Feb. 21.
Last month, Finance Minister Pranab Mukherjee said the government was looking into a report from Global Financial Integrity (GFI), a Washington-based think-tank, which estimated illicit outflows of about $16 billion a year from 2002-2006, about 1.5 percent of gross domestic product (GDP).
Following are some of facts about the issue.
HOW MUCH OUTFLOW FROM INDIA
* GFI estimates the present value of India's total illicit flows from 1948 to 2008 at $462 billion, while a report from the Bharatiya Janata Party, the main opposition party, has put the total at $500 billion to $1.4 trillion.
* GFI estimates the size of the underground economy at $640 billion, roughly half of the India's GDP, although that figure does not include funds from drug trafficking, contraband, illegal foreign exchange transactions or under-invoiced international trade.
* Close to three-quarters of illegal funds are deposited overseas, GFI estimates.
* The international corruption watchdog, Transparency International, in its latest report, has ranked India 87th on its corruption perception index of 178 countries, a worse rating than Columbia, Brazil and China.
ECONOMIC IMPACT
* Analysts say the Indian economy could grow at 10-11 percent a year from a current 8-9 percent if the government brought back illegal funds from abroad and stamped out corruption in government.
* The estimated $462 billion of illegal funds held abroad could wipe out India's external debt, plug the fiscal and trade deficits, and leave enough to fund the defence budget.
WHY THE UNDERGROUND ECONOMY EXIST
* Corruption and poor enforcement of laws. Despite two decades of liberalisation, the state still has a heavy hand on the economy, and opaque rules give officials leeway to grant favoured parties anything from a contract to mining rights.
* Police, tax authorities and investigators are understaffed and underpaid and courts are notoriously slow, reducing the risk of prosecution for black economy dealings.
* Financial corruption is so widespread that one has to pay bribes even to get a birth or death certificate and pay money to get legal benefits from government departments.
* A thriving foreign exchange market outside official channels, known as "hawala", as well as drug smuggling and other contraband and human trafficking have contributed to the problem.
TAX LOSSES
* In the last 18 months alone, tax authorities have found about $3.3 billion in illegal funds and stopped the transfer of about $7.6 billion overseas.
* Just 3 percent of India's 1.2 billion people are registered with income tax authorities while millions do not report their income at all.
* The over stretched tax department has yet to recover more than $25 billion in taxes from defaulters.
LIMITED DETERRENTS * The penalties are minimal when compared with the gains from wrongdoing. The slow pace of enforcing laws means few people are convicted for corruption or tax evasion. * Even the Central Bureau of Investigation has failed to prosecute high-profile cases and critics accuse the agency of being influenced by the government. * Most economic offences like tax evasion or corruption are punishable with a short period in prison and fines. This contrasts with China where corruption can lead to a death sentence.
GOVERNMENT ACTION
* Finance Minister Mukherjee has said the government plans legislation and diplomatic treaties to bring back illegal funds from overseas and prevent such flight. There could be some announcements in the Feb. 28 budget.
* The Congress party's young leader, Rahul Gandhi, widely seen as a prime minister-in-waiting, has also said that funds held overseas should be brought back.
* Critics say that ruling political parties are unlikely to take a tough stand unless forced by the top court.


Clic here to read the story from its source.