Black Money

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Indian Black Money Abroad In Secret Banks and Tax Havens
Second Report Of The Task Force on the steps to be taken by India Members Shri Gurumurthy, Chartered Accountant, Chennai Shri Ajit Doval, former Director Intelligence Bureau, Delhi Prof R.Vaidyanathan, Professor of Finance Indian Institute of Management, Bangalore Shri Mahesh Jethmalani, Senior Advocate, Mumbai

Submitted to

BHARATIYA JANATA PARTY

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I. The First Interim Report

The first Interim Report of the Task Force appointed by the Bharatiya Janata Party was released to the public on 17-04-2009. Afterward different world governments, particularly those in the West, have increasingly begun targeting tax havens and intensely began pursuing black money. The US, and France particularly began a huge campaign against the evil of black money. The estimates black money lodged in tax havens by global financial institutions like the International Monetary Fund reached as high as $18 trillion. The instability in the global financial order itself was traced to the evil money. So the issue has now acquired a totally different dimension.

In the first Interim Report, the Task Force had suggested broad national and global strategy for dealing with the menace of black money out of the country. The substance of the recommendations of the Task Force in the First Interim Report is summarized here:

Global Strategy:


Creating a powerful public opinion and broad national consensus on the issue. Those who do not support the move should be seen as supporters of black economy.



India must become a very active player in the G-20 efforts against secret banking and tax havens.



India must urge the German government to provide the details of the Indian names from the LGT bank’s secret records. The BJP, if voted to power, must

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send a special emissary to Germany, which is willing to give the details of Indian names in the LGT bank’s secret records. •

India must strive for a coordinated global and multilateral effort, which is the only solution to undo the regime of banking secrecy.



India should work with the West to get the OECD rules on internationally agreed tax standards and disclosures



India must appoint a special ambassador with adequate knowledge of tax havens and secret banking issues to work with the G-20 specifically for framing India-friendly rules.

National Strategy:


Collection of travel information about persons visiting Switzerland and other tax havens. This should start with cabinet ministers and other high-profile political personalities

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Monitoring tax havens that have high transaction frequency with India India to become a full-fledged member of the Financial Action Task Force Use of financial intelligence sharing for security purposes Legislative support: Just as the Obama Administration is planning specific anti-tax haven laws, India should also target tax havens and secret destinations



Government should constitute a high level Task Force with representatives from Finance Ministry, National Intelligence Agencies, Ministry of Law, RBI, SEBI, Economic Intelligence Units, Central Vigilance Commission, CBI and other experts to collect and process the information and start legal action wherever feasible



The history of the illicit wealth holders should be brought out 3

When this issue came up before last general elections to Parliament, the initial reaction of some of the leaders in the ruling establishment was outright denial of the issue. They even questioned the existence of such money. But when the issue deepened with the progress of the campaign for the general elections and it became an important election issue with the BJP-led National Democratic Alliance and other opposition parties taking up the issue in a big way, the Ruling Congress-led UPA Alliance was also forced to admit that huge Indian black money had been stashed away abroad and the Chairman of the United...
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