BJP mulls black cash pardon
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- Published 4.04.09
April 3: If the BJP is voted to power, it could come out with an amnesty scheme to force tax dodgers to bring back the billions of dollars they have stashed away in Swiss banks and other tax havens around the world.
“The usual model is to offer an immunity on tax payments that can extend to six months,” said S. Gurumurthy, the chartered accountant who has been named a member of a task force formed by the BJP to help ferret out information about the cash mountain abroad.
If an amnesty scheme is offered, it will be only the second since the process of economic liberalisation began in 1991.
P. Chidambaram, who was the finance minister in the H.D. Deve Gowda government, had announced a voluntary disclosure of income scheme (VDIS) in the budget in 1997. The VDIS — which was operational between June and December 1997 — was one of the most successful black money schemes and had raised Rs 10,000 crore.
The BJP released its manifesto today which said: “We will take determined steps to bring back the money (estimated at Rs 25,000 crore and Rs 75,000 crore) illegally stashed in Swiss bank accounts and tax havens and use it for infrastructure development, housing, health and social welfare schemes.”
The manifesto added that if this sum was recovered, the government would be able to allocate Rs 4 crore to every Indian village.
The G20 has also announced a crackdown on tax havens, following which the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan have been named the worst offenders. The four are usually not preferred by Indians. The G20 has also threatened to slap sanctions on havens that refuse to exchange information.
Prime Minister Manmohan Singh endorsed the G20’s call yesterday but the Congress manifesto has been silent on the issue.
Along with Gurumurthy, the BJP named three other members to the task force: R. Vaidyanathan, a professor of finance at the Indian Institute of Management, Bangalore; Mahesh Jethmalani, a lawyer and the party’s candidate against Priya Dutt, and Ajit Doval, a national security expert. All of them have agreed to work voluntarily on this task force.
“India is the only country that has not taken an aggressive position on tax havens. They have not uttered a word against tax havens which means that they are happy with them,” Gurumurthy told The Telegraph.
Gurumurthy said the task force would try and determine how much money had been spirited abroad. He said Raymond Baker, a researcher on corruption and money laundering, had estimated that about $137 billion had been taken out of India between 2002 and 2006.
A study conducted by Baker’s organisation, Global Financial Integrity, and sponsored by the Ford Foundation reckoned that $27.3 billion was sucked out of the country every year.
“The task force is in touch with Raymond Baker and we are trying to work with him,” Gurumurthy said.
BJP manifesto reports in Nation