Govt panel to curb black money

 The government today set up a committee that will examine ways to tighten laws to curb black money.

The panel, which has been asked to submit its report within six months, will be headed by Sudhir Chandra, the chairman of the Central Board of Direct Taxes. The committee will study ways to prevent the transfer of black money abroad, besides recovering such assets.

A report of the Swiss Banking Association allegedly claimed that Indians were among the biggest depositors of black money in Switzerland’s banks. Recently, Wikileaks head Julian Assange had said Indians figured prominently among those having secret accounts in Swiss banks.

India’s black money abroad is believed to be more than its total foreign exchange reserves. A study conducted three years ago by Global Financial Integrity estimated that black money worth $27.3 billion was sucked out of India every year.

The committee will work out a system which will plug the loopholes that help to generate black money. It is likely to suggest measures such as declaring wealth generated illegally as national assets, enacting or amending laws to allow confiscation and recovery of such assets and providing for exemplary punishment against the perpetrators.

Revenue officials said the new measures being considered could verify from where the money actually came from without scaring off genuine investors.

Mauritius ranks first among all countries in FDI inflows to India with cumulative investments amounting to $34 billion, or 44 per cent of the total FDI flows.

Earlier too, the government had tried to get black money back through amnesty schemes. The last such scheme was attempted by P. Chidambaram when he was the finance minister in the H.D. Deve Gowda government.

Chidambaram had announced a voluntary disclosure of income scheme (VDIS) in the Union budget for 1997. The VDIS — which was operational between June and December 1997 — could raise just $2 billion.