Need to temper expectations

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TOPICS
corporate crime
economic offence/ tax evasion
Fresh revelations about the existence of a list of
1,195 Indians with accounts in a bank in Switzerl
and, estimated to contain funds to the tune of Rs.
25,420 crore, has escalated the pressure on the go
vernment to make renewed efforts to trace unaccoun
ted money stashed away abroad. There is little dou
bt that the probe will now have to be widened to t
ake the new disclosures into account. However, the
publication of the list by an international conso
rtium of investigative journalists may not automat
ically mean that all these accounts are illegal or
that the funds in them are tainted. That some pro
minent industrialists and other individuals have f
ound a place in this black list is cause for som
e excitement, but should not give rise to heighten
ed anticipation that the country is closer than be
fore to bringing home wealth hoarded away in safe
havens. In the public imagination, the archetypal
holder of a Swiss bank account is the businessman
who parks money in a jurisdiction famed for its ba
nking secrecy, or the political leader hiding corr
uption-tainted cash. It is not known how many of t
hose named in the fresh list of offshore accounts
said to be held by Indian nationals in HSBCs bank
ing arm in Switzerland fall under either of these
categories. Some of them have denied that they had
any illegal accounts or that they had any oversea
s bank account at all.
The need, as pointed out rightly by Finance Minist
er Arun Jaitley, is not for names, but hard eviden
ce to show that these accounts held black money. T
hese accounts will have to be scrutinised first to
assess whether its holders were entitled to opera

te them, whether the money was legitimately acquir

ed and liable to be taxed in India. After scrutiny
of an earlier list of 628, the government found t
hat 428 of them were actionable, and there were 12
8 orders of assessment. It has launched prosecutio
ns in 60 cases for wilful tax evasion. The process
ought to be completed by March 31 this year. Thes
e numbers provide some perspective on the mammoth
task at hand, and the clear absence of any shortcu
ts. Expectations arising from these disclosures wi
ll have to be tempered. The government will do wel
l to continue efforts to act on the suggestion by
the Special Investigation Team that treaties signe
d with other countries to curb black money be rene
gotiated. The Attorney General has also spoken abo
ut new legislative measures on the treatment of un
accounted money abroad. Even while strengthening t
ransborder measures to check tax evasion, domestic
laws also require amendments to curb the menace.
Dealing with the black economy is a complex issue
that involves managing jurisdictions where confide
ntiality is the norm, and negotiating an exchange
of information based on an applicable legal framework.