Does FM’s statement about an amnesty scheme for black money ring true? There have been amnesty schemes in the past, such as the one in 1997. Those were about domestic black money. They didn’t bring in much in terms of disclosed income. There were two reasons for that. First, there was never finality about amnesty schemes. One could wait for the future one.
This is despite every such scheme announcing that it would be the last such. Second, there are reasons for black money generation. If those reasons are not eliminated, what is the incentive? Partly because of the Global Financial Integrity (GFI) report and partly because of other leaks that have surfaced (Wiki-Leaks is only one), the thrust has shifted towards the global part.
Of the 70 double tax avoidance agreements, 74 do not have provisions for the exchange of banking information. Nor have we signed tax information exchange agreements with countries known to be tax havens.
FM has told us a multi-disciplinary committee to estimate black money abroad. That’s neither here, nor there. The last good estimate of black money in India was done by NIPFP, way back in 1984-85.
Its figures, high though they are, are really of gross outflows, not net outflows. Having said this, there is a difference between information on account-holders being available to the government and that information being placed in the public domain.
OECD norms require the former, not the latter. FM is probably right that placing this information in the public domain will hinder further negotiations and re-negotiations of agreements. But that argument would have been more convincing had we pushed more seriously for these agreement. We have known about the German leak (through LGT) for 2 years. What has been done in the last 2 years, with the Swiss, or with other countries?
Contrast this with the American reaction. It is this that bolsters the feeling that the government is not very serious and has something to hide.