17.12.14

Black Money Statz


Nearly $95 billion (Rs.6 lakh crore) was illegally taken out of India in 2012, bringing the total illicit outflow of capital from the country to $440 billion (about Rs.28 lakh crore) in the preceding decade, according to the latest study by Global Financial Integrity (GFI), a Washington DC based research and advisory organization.
Not only have taxes not been paid for these enormous sums, they may be used for various corrupt or criminal activities once parked in foreign havens. Overall, only in 2012, nearly a trillion dollars ($991 billion) in illicit capital flowed out of developing and emerging economies -an all time high, the study noted. Between 2003 and 2012, the outflows added up to a monstrous $6.6 trillion, averaging nearly 4% of the developing world's GDP .
The issue of black money has been roiling India in the recent past. The new Modi government had promised to bring back black money stashed away in foreign banks within 100 days of coming to power. While investigations are inching forward, opposition parties have been pressing for more decisive action.Despite much political noise over “black money“, the outflow of national wealth seems to be continuing unchecked and growing with each passing year. The GFI study says that illicit outflows are growing at an inflation-adjusted 9.4% a year -roughly double the global GDP growth in the same period.
As if these numbers are not mind-boggling enough, GFI chief economist Dev Kar stresses that these estimates are “conservative“ since several types of illegal transactions are not reflected in these figures.
“This means that many forms of abusive transfer pricing by MNCs as well as much of the proceeds of drug trafficking, human smuggling, and other criminal activities, which are often settled in cash, are not included in these estimates,“ explained Kar, who served as a senior economist at the IMF before joining GFI in January 2008.India ranked third after China and Russia in the quantum of illicit outflows in 2012. For the whole decade of 2003 to 2012, India ranks fourth. A total of 151 countries were studied by Kar and his colleague Joseph Spanjers at the GFI.
“As this report demonstrates, illicit financial flows are the most damaging economic problem plaguing the world's developing and emerging economies,“ said GFI president Raymond Baker , a long-time authority on financial crime. “These outflows -already greater than the combined sum of all foreign direct investment FDI and ODA flowing into these countries -are sapping roughly a trillion dollars per year from world's poor and middle-income economies.“
The $991.2 billion that flowed illicitly out of developing countries in 2012 was greater than the combined total of foreign direct investment (FDI) and net official development assistance (ODA) these economies received in that year. Illicit outflows were roughly 1.3 times the $789.4 billion in total FDI, and they were 11.1 times the $89.7 billion ODA they received in 2012.

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