The Tribune, Chandigarh
Black money stashed abroad
Strange shielding of swindlers
by Inder Malhotra
WHAT kind of government is the Congress-dominated United Progressive Alliance trying to provide the country with? Barely a fortnight after the grand declarations — at the Congress party’s 125th anniversary — of “zero tolerance” of corruption, venality and wrong-doing, the powers that be are resisting resolutely the legitimate demand for a disclosure of the names of 26 Indians caught stashing their black money with the LGT Bank in Liechtenstein.
Having received the names from the bank concerned, the Union government decided to conceal them. It might have succeeded in this dubious design were it not for public interest litigation (PIL) filed in the Supreme Court by three concerned citizens — eminent lawyer Ram Jethmalani, former Secretary-General of the Lok Sabha Subhash Kashyap, and former Director-General of Punjab Police KPS Gill. In the apex court, the government tried to brazen its way out by repeating its specious plea that any disclosure would run counter to the “confidentiality clause” in the double-taxation avoidance agreement with the country concerned.
Such ploys have worked in the past. For instance, successive governments have succeeded in hiding the names of fat cats who habitually took huge loans from public sector banks and merrily refrained from paying them. Non-Paying Assets (NPAs) was the official euphemism for these bad loans; at work, in fact, were NPCs (Non-Paying Crooks). Yet, their identities were kept secret on grounds of “customer confidentiality”. This time, however, the trickery may not work, judging by the proceedings in the Supreme Court so far. When Solicitor-General Gopal Subramanium went on pleading “international obligations” and even claiming “immunity” for as many as 16 of the 21 documents the government has filed, Justice B. Sudershan Reddy, presiding over the two-member bench, observed: “Forget about the documents … We are asking you what prevents you from disclosing the names?” At an earlier stage, his lordship had asked the Solicitor-General: “What is the big deal about disclosing the names?” Eventually, the government’s law officer offered to submit the names of the culprits to the apex court “in confidence” but persisted in refusal to make them public. Since then the Central Board of Direct Taxes has submitted the 26 names to the apex court in a sealed cover with the edict that these must not be put in public domain.
What happens next would depend, of course, on further proceedings in the Supreme Court and its final order. But that is now immaterial. For the UPA government seems firm in being totally indifferent to the people’s diminishing faith in its promises and growing suspicions about its motives. Would someone in authority please explain why is the secrecy of the list of the country’s swindlers being guarded more zealously than that of top-secret military files that are sometimes found on the roadside?
No wonder, there is a widespread impression that the government’s secretiveness is fuelled by the fact that in the hidden list are mentioned not only tarnished tycoons, corporate crooks, hawala honchos and so on but also some “high-profile” politicians and bureaucrats. The plea of international obligations is hogwash. There are reports that Germany had initially offered to convey the swindlers’ list unconditionally. What happened to change the situation and why?
It is against this backdrop that the veteran BJP leader, Mr L. K. Advani, at a public rally in Mumbai, raised the question whether the Prime Minister was hesitating to take steps in this matter because “people belonging to the Congress and its allies are involved”. He also drew the Prime Minister’s attention to a news report alleging that the name of a former Prime Minister also figures in the list.”
Another red herring that the government through its Solicitor-General has drawn across the trail is that proceedings to collect tax from and impose penalties on the worthies on the Liechtenstein list had begun. Once again their lordships had to remind all concerned that the matter went “far beyond taxation”. The rogues that stash black and ill-gotten wealth abroad are criminals. They need to be exposed and punished, not coddled in strict privacy.
What has come to light about the Liechtenstein deposits is disgraceful, no doubt. But it is, in relation to the problem of black money, whether stashed abroad in secret bank accounts or hoarded at home, what the proverbial drop is to the bucket. To India’s eternal shame, half its economy is black at any given time. At the same time, all expert estimates — including that of Dev Kumar of Global Financial Integrity, a Washington-based watchdog — agree that the Indian black money stashed abroad with virtual impunity is close to $ 3 trillion.
Successive governments have periodically promised to bring this money home. But so far none has done so. Suppose by some miracle someone some day does bring back the mind-boggling amount home and decides to distribute it among the 1.2 billion Indians equally, each of us can expect to get a reasonable amount. Mr Arun Kumar, a Delhi-based economist who has worked on the problem for years and has published an informative book on the subject, argues that had the Indian black money stacked in the vaults of foreign banks (that earn a decent income from it) not gone out of the country but were invested productively here, the per capita income of Indians would have been $ 5,000 and not $ 1,176 as at present at market exchange rates. All this, however, is wishful thinking, given the rude realities of life in India. The money hasn’t come back in the past, and it is unlikely to be brought back in the foreseeable future. The United States and several other countries have forced Swiss banks to waive their secrecy laws and cough up the illegal deposits of their respective citizens. India hasn’t even tried.
In this context Mr Advani went on the offensive against Prime Minister Manmohan Singh for the latter’s “failure” to deliver on his 2009 promise to “take steps to bring back the black money stashed by Indians in foreign banks within 100 days of coming back to power”. The BJP leader also complained that Dr Singh “hadn’t bothered to reply to a letter written jointly by NDA leaders over a week reminding him of his poll promise”.
Therein, unfortunately, lies the rub. The black-money-stashed-abroad issue looks like turning into a no-holds-barred slugfest between the Congress and the BJP, as the problem of mind-boggling corruption already has.
It was our R. Vaidya that fired the shot across the bows on Swiss banks and Indian illegal money.