A whopping $500 billion or Rs 24.50-lakh crore has been stashed away by Indians in foreign tax havens, according to the Central Bureau of Investigation (CBI).
The first-time estimate was made by the CBI Director, Mr A.P. Singh, during the inauguration of First Interpol Global Programme on Anti-Corruption and Asset Recovery.
The disclosure comes at a time when the Finance Ministry is considering introducing an amnesty scheme to bring back black-money. The Finance Ministry has commissioned a study on unaccounted income and wealth held within and outside the country. The study group is also expected to suggest methods to tax and repatriate this money.
“India, in particular, has suffered from the flow of illegal funds to tax havens such as Mauritius, Switzerland, Lichtenstein, British Virgin Islands, etc.,” Mr Singh said in his speech.
‘Political will' lacking
He blamed a lack of “political will” in such tax haven countries to part with information which can help trace such assets, adding that 53 per cent of the countries identified as “least corrupt” by corruption watchdog Transparency International are also tax havens where “most” of the corrupt money ends up.
The World Bank estimates the cross-border flow of money from criminal activities, including corruption and tax evasion, to be around $1.5 trillion annually. Around $40 billion of this flow is on account of bribes paid to public officials in developing countries, Mr Singh disclosed.
The CBI chief did not mention any basis for his estimate, but he did say that development of new methods of financial flows and communication technologies have made it easier for the corrupt to conceal and stash away stolen wealth.
Complex process
On the other hand, differences in legal systems, high costs in coordinating investigations, inadequate international cooperation and bank secrecy laws have made the task difficult for anti-corruption authorities, he added.
Quoting the World Bank estimates, Mr Singh said that only $5 billion in stolen assets have been repatriated over the past 15 years. That leaves a wide gap between the outflow from the developing countries and its subsequent repatriation.
“Managing the asset recovery investigation is complex, time consuming, costly and, most importantly, requires expertise and political will. There are many obstacles to asset recovery. Not only is it a specialised legal process filled with delays and uncertainty, but there are also language barriers and a lack of trust when working with other countries,” Mr Singh said.