Go after black money2 min read . Updated: 07 Dec 2008, 09:53 PM IST
Go after black money
Go after black money
We all hear stories of how our politicians hoard money in Swiss banks. We also hear about the strict secrecy maintained by Swiss banks about the details of their clients, making it virtually impossible for governments all over the world to trace the black money stacked away in these tax havens.
To address this issue, the United Nations general assembly adopted the UN Convention against Corruption (UNCAC) on 31 October 2003 (resolution 58/4) and it came into force on 14 December 2005, following the 30th ratification by Ecuador on 15 September at the 2005 world summit.
To combat corruption, the UN convention includes measures on:
- Establishment of anti-corruption bodies.
- Enhanced transparency in the financing of election campaigns and political parties.
- Criminalizing all forms of corruption (bribery, embezzlement, trading in influence and the concealment and laundering of the proceeds of corruption.
- Prevention and investigation, and prosecution and extradition of offenders.
- Tracing, freezing, seizure and confiscation of the proceeds of corruption.
- Return of assets to countries of origin.
By some estimates, there is around $1.5 trillion of black money that has originated in India. The figure is almost double the $800 billion that the US has spent on the recent financial sector bailout (in a 2006 report on black money in Swiss banks, the Swiss Banking Association has given information on the deposits of the top five countries. India has the highest, with $1.456 trillion).
If the Indian government had found time in the last five years to ratify UNCAC, we would have got at least a portion of these funds back to India.
In October, the Central Vigilance Commission (CVC) reminded the government for the second time to ratify UNCAC. That would help the country seek the return of these kinds of dodgy assets lying in tax havens.
German authorities early this year were willing to provide details of Indian nationals who had parked black money in the Liechtenstein-based LTG Bank, provided the Indian government approached it through formal channels. But CVC was not able to seek the information as India had not ratified UNCAC.
Reluctance on the part of the government to ratify the UNCAC can be attributed to the fact that most of the black money deposited outside the country is believed to belong to influential politicians and bureaucrats.
It’s interesting to note that Pakistan, Sri Lanka and Bangladesh have ratified the convention. It has been signed by 140 countries and at least 120 countries have ratified it till now. But for the Indian government, UNCAC does not seem to be a priority.
What is important is that the convention also addresses the issue of money laundering. It’s well known that terrorists use hawala networks to channel funds to India. It might be possible that terrorists involved in the Mumbai attacks got funds the same way.
It is outrageous that our children die of malnutrition in states such as Madhya Pradesh and Orissa when our politicians and bureaucrats have more than a trillion dollars of black money on foreign shores.
As the world celebrates the International Anti-Corruption Day on 9 December, we can only hope that better sense prevails on our politicians and they put the nation’s interest before their self-interest. We have to make sure that it happens. It’s time we give up our chalta hai (anything goes) attitude.
Suresh Veluru works in the technology sector. Comment at email@example.com