Stashing of unaccounted money in foreign banks and refusing to make any disclosures after a number of scams came to light, has been a ticklish issue with which the previous and the current Government at the Centre have been grappling. This issue has created much bad blood among the national level political parties and their affiliates because information received through various non-official but highly dependable sources revealed involvement of many political and non political figures of much consequence. In its election manifesto, the Modi government had clearly mentioned that it would spare no effort to unearth the details of unaccounted money and persons, and bring them to book through legal process. In fact that procedure did start and apart from keen interest shown by the finance ministry in resolving the issue, the case has also been brought to the notice of the Supreme Court of India which has directed the Central Government to keep it informed on the progress of investigation.
It is now understood that Union Finance Ministry’s Special Investigation Team on black money has received a new dossier on tax related business information on about a dozen entities whose names were reported by an international group of investigative journalists sometime back. On this basis and other investigative approaches, the Union Finance Ministry has come to the conclusion that there is a need for tackling this issue through a new mechanism. Bilateral discussions, conference calls and face-to-face meetings with the competent authorities of our treaty partners, which now include well known tax havens and offshore financial centers such as British Virgin Islands, Jersey, UAE and Singapore, are being planned and the cooperation in this regard will be deepened in future. A team of special officers may visit the entities or the meetings could be held in India itself to go into the niceties of all cases. These bilateral meetings will help India in making targeted and specific requests for information and to understand the problems.
A significant development in the investigation process of illegal money stashed in foreign countries is that Switzerland has indicated willingness to provide information in respect of cases where investigations have been carried out by the IT Department independently. Previously, Swiss Government was not prepared to cooperate with Indian officials arguing that the information which the Indians had and about which they desired to have fuller investigation was stolen and it would not entertain it. However, after the visit and exchange of views between a high ranking Indian finance ministry official with his Swiss counterpart, the Swiss Government has now indicated to cooperate with India in investigating the details of the money stashed in HSBC. It will be reminded that the HSBC list which the finance ministry had been able to procure via France, were investigated by IT Department independent of HSBC. Swiss Federal Tax Administration has agreed that their competent authority would assist India in obtaining confirmation of genuineness of bank documents on requests by the Indian side and also swiftly provide information on requests relating to non-banking information.
These steps, when taken into consideration in their totality, show that the Union Finance Ministry is not soft paddling on this very sensitive issue but is proceeding step by step fulfilling all legal and technical requirements. It has to be noted that stashing of illegal money in foreign banks is an old practice in our country and because those involved in this practice have been highly influential, it has been very difficult to go to the root of these illegalities. We know that the opposition in the parliament tried to corner the Government on this issue and accused it of soft paddling with the entire case. The aim of the opposition was to catch the Government on the wrong foot. But the Union Finance Minister, who has been handling the issue, always assured the house that investigation in the case was on the right track and things would come to open at proper time. The ground situation today is that the Swiss Government has changed its stance and is now able to see the reason behind India’s stand on the issue. Now it agrees to cooperate in the disclosure of illegal money stashed in its banks. We are hopeful that as the matter continues to be pursued, it will become impossible for anybody in this country to take recourse to hiding their income and avoiding income tax by stashing their monies in foreign banks.
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