NEW DELHI :
A reliable estimation of unaccounted income in India was not possible, a standing committee on Monday said while submitting the final report before both the Houses of Parliament, almost eight years after the finance ministry had commissioned three independent studies on black money, and nearly five years after the last results were placed before the panel.
In the report titled, Status of unaccounted income/wealth both inside and outside the country-A critical analysis, senior finance ministry officials said that a reliable estimation of black money is extremely difficult, since the three independent studies threw up varied results, showing that it could be anything between 7% and 120% of gross domestic product (GDP).
In October 2010, former finance minister Pranab Mukherjee directed the National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM) to conduct independent studies on black money. The studies had so far not been made public, though summary findings were quoted in the standing committee report.
“As regards the macro estimation of unaccounted income and wealth, the three studies have observed that the reliable estimation of unaccounted income and wealth is extremely difficult. They have also reported a very huge variation in estimations of unaccounted income ranging from 7% to 120% of the reported GDP. There is a lack of consensus regarding the most suitable method in the Indian context," revenue secretary Ajay Bhushan Pandey had said earlier.
The preliminary report of the standing committee, headed by M. Veerappa Moily, was earlier presented to Sumitra Mahajan, the speaker of the 16th Lok Sabha.
NIPFP had said that between 1997 and 2009, illicit financial flows out of the country was in the range of 0.2% to 7.4% of GDP, while NCAER said the estimated wealth accumulated outside India between 1980 and 2010 stood at $384-490 billion. NIFM’s estimations of total illicit outflow in 1990-2008 was at ₹941,837 crore ($216.48 billion).
All three studies concluded that the maximum amount of black money was generated in realty, mining, pharmaceuticals, pan masala, gutkka and tobacco industries, besides bullion and commodity markets, the film industry and educational institutes. The securities market and manufacturing, too, contributed to unaccounted wealth.
The panel said it would formulate its detailed recommendations after consulting experts and following the replies of the finance ministry. “The committee also desires that the long-delayed Direct Taxes code should be finalised at the earliest and reintroduced in Parliament with a view to simplifying and rationalising the direct tax laws in the country," it added.
Addressing both Houses of Parliament on 20 June, President Ram Nath Kovind said the campaign against black money will be taken forward at a faster pace. “In past two years, 425,000 company directors have been disqualified and the registration of 350,000 suspicious firms has been revoked. We are now receiving information about all those who have stashed black money abroad," he said.