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.