The Candid Eye

May 30, 2009

GFI Lead Economist to visit India

Filed under: Corruption — thecandideye @ 3:00 AM
Tags: , , , , ,

Global Financial Integrity’s (GFI) lead economist, Dev Kar will be visiting India to hold high level meetings and interviews about ‘Illicit Financial Flows’ from India .

 Dev Kar, Lead Economist for Global Financial Integrity (GFI) and author of the highly-publicized GFI report “Illicit Financial Flows from Developing Countries: 2002-2006,” will be visit Mumbai, Pune, Jamshedpur, Calcutta, and Delhi over the course of a three-week tour of India starting Monday, June 1st. 

Mr. Kar will be talking about his work on illicit financial flows including measuring quantity and patterns of illicit outflows from developing countries and tracking illicit flight capital once it leaves its country of origin. 

Mr. Kar will also be discussing the impact of illicit capital flight on developing economies, U.S. and international initiatives to increase transparency within the global financial system, and what individual nations, such as India, may do to curtail yearly outflows of “black money’ that cumulatively drain as much as $1 trillion a year out of the developing world-$27 billion from India alone.

Mr. Kar will be available for one-on-one meetings and television and radio appearances upon request.  Journalists, television and radio producers, academics, and government officials are encouraged to take advantage of Mr. Kar’s trip to India to learn first-hand about the problem of illicit financial flows and what is being done within the U.S. and on the global stage to combat them. 

June 1-7: Mumbai

June 8-10: Pune

June 11-13: Mumbai

June 14-19: Calcutta

June 19-20: Jamshedpur

June 20-23: Calcutta

June 23-25: Delhi

To schedule a meeting with Mr. Kar please contact Monique Perry Danziger, Communications Director at +1-202-293-0740 or at  You may also contact Mr. Kar directly at +011-91-703-447-0160 or at

See also the official statement by Global Financial Integrity on Illicit Capital Flight from India.

April 19, 2009

EC blocks BJP ad on dirty money – Another Dirty Sycophant of Congress!!

It is national shame that EC which is supposed to be unbiased and neutral in its stand,has blocked this attempt to create awareness among people.Thus EC is attempting to keep people of India ignorant.Not many people realise the necessity to bring back the black money if it is not shown in TV.The impact is less when compared with newspapers.By doing so, the EC has violated the freedom of expression.Here is news excerpts.Source : TOI.

BJP on Saturday looked all set to raise its ante higher on its theme for bringing back the black money stashed by Indians abroad after BJP leader L K Advani addresses a media gathering. The Election Commission restrained it from showing a 15-second audio visual spot that was produced to be part of the party’s campaign. 

Party sources said that the EC declined the party the permission to run the clip on television and on other visual media, on the ground that the shot of a “foreigner” receiving a briefcase from supposedly a corrupt Indian was not in good taste. But that is what the truth is.When did Switzerland and India become one?FYI..People in Swiss & Liechestein are white in color.This commercial is about Indian Money in the hands of Swiss bank authorities.Isn’t it?Oh..Are you coming to say that the receiver also has to be an Indian.May be Sonia can do that role?She has become an Indian now.What do you say?

Those involved in making the film, however, alleged a hidden agenda, saying that the `foreigner’ was integral to the theme of money being spirited away by the corrupt in the country. Source said that the party was completely baffled by the decision and was planning to take up the issue. Eversince the black money issue has been raised in the G20, the congress honchos have been suffering nervous breakdown.It is no wonder, Naveen Chawla being a sycophant of congress, has objected to this.But the treatment for his nervous breakdown is, he has to sever ties with congress honchos.Is it too much to ask, Chawla?

The film on black money was one of the five 15-second spots that had been submitted to the EC for approval as campaign material to be launched by the party in the second phase of elections. As P Chidambaram has done U turn on Kandahar issue, the EC has done the same thing.Are you guys compaigning for congress under the garb of EC?Can you be more sane?

BJP has been raising the issue of repatriation of black money stacked away abroad in Swiss banks and other tax havens, at a time when an international consensus has emerged favouring disclosure of identity of those having secret accounts with Swiss banks and in tax havens, and for repatriating the money back to the countries hard hit by the economic slump. When other countries are looking out for ways to get their people’s money back, here in India, our EC is objecting to create awareness among masses.Sonia and Congress will be very happy to keep the people of India in perpetual poverty.

BJP’s campaign plank has attracted an angry response from Congress which has tried to mock the party by referring to the allegations of corruption against party leaders. Congress has accused the party of indulging in gimmickry, and said that bringing money back would not be possible except in specific cases where the request was backed by specific evidence. 

That has, however, not deterred the BJP, particularly L K Advani who on Friday substantiated his case by releasing documents. While BJP’s prime ministerial candidate led the campaign on black money repatriation, Gujarat chief minister Narendra Modi kept up the momentum by holding a opinion poll on the issue in every Lok Sabha constituency in the state last week. Has any other congress neta done this?Will Karunanidhi,Lalu,Mulayam,Mayawati,Arjun Singh dare to do this?

Advani has been speaking about the issue at each one of about 70 campaign rallies he has addressed so far, to ensure the issue does not die out. 

Meanwhile, the CPM on Saturday questioned Advani’s promise to bring back black money from foreign banks, charging the erstwhile NDA government with diluting relevant laws and making way for money being illegally transferred out of India to tax havens. Is CPM not aware that Congress has ruined (Misnomer:ruled) this country for 60 years and the most of the money was stashed away before the NDA period?Are you guys real communists?

April 13, 2009

‘Indian money in Swiss & other banks is over Rs 70 lakh crore’

Filed under: Corruption,India — thecandideye @ 5:04 PM
Tags: , , , , , , , , ,

You can access the same news here.

It is no secret that black money has been flowing out of the country into Swiss banks and other tax havens worldwide for years now. While there is no official estimate to quote yet, LK Advani, the prime ministerial candidate of BJP-led National Democratic Alliance, recently said it might be in the range of Rs 25,000 crore to Rs 75,000 crore. R Vaidyanathan, professor of finance at the Indian Institute of Management, Bangalore and a regular columnist for DNA, feels the real figure is many times that number.
At around $1.4 trillion (over Rs 70 lakh crore), it is way over India’s gross domestic product of Rs 43 lakh crore for 2007-08, Vaidyanathan, who was on Tuesday named the head of a taskforce by Advani for preparing a strategic document to get back the national wealth, told DNA. Excerpts:

Which are the various tax havens where the ill-gotten wealth of Indian businessmen and politicians is stored?
There are presumably more than 70 tax havens in the world. Indian wealth could be more in Switzerland and various British/ US islands.

How much Indian money do you think would be locked away in Swiss banks? What is the basis for the estimate you make?
I make this estimate on the basis of a report titled “Illicit Financial Flows from Developing Countries: 2002–2006, Global Financial Integrity,” written by Dev Kar and Devon-Cartwright Smith. It was a project sponsored by the Ford Foundation and the final report was released sometime back in December 2008.

Financial flows in the context of this report include proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of licit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade payment of taxes).

In 2006, the most recent year of the Global Financial Integrity (GFI) study, developing countries lost an estimated $858.6 billion to $1.06 trillion in illicit financial outflows. Even at the lower end of the range of estimates, the volume of illicit financial flows coming out of developing countries increased at a compound rate of 18.2% over the five-year period analysed for the study.

How much of this was siphoned out of India?
On an average, for the five-year period of this study, Asia accounts for approximately 50% of overall illicit financial flows from all developing countries. This report shows that the average amount moved from India annually during 2002-06 is $27.3 billion. This means, during the five-year period, the amount taken away is $27.3 billion x 5 = $136.5 billion.

It is not that all these amounts went to Swiss banks; it has gone to different tax and secret shelters. The share of Swiss banks in this dirty money is a third of the global aggregate; some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks. This appears in page 30 of the report mentioned above.

The important point is that this is only for five years. More amounts were stashed away during the Nehruvian socialist regime. So the loot for 55 years would be several times the amount. In fact, in those days, the Indian rupee commanded a better value per US dollar, so fewer rupees could get a dollar. Hence the estimation that Indian money stashed away may be of the order of $1.4 trillion.

How did the money get out?
There are several methods/ reasons — under-invoicing/ over-invoicing of exports and imports and getting the balance stored abroad; kickbacks from major defence/ civilian contracts; in the olden days, smuggling of gold and illegal money; transactions done abroad and not reported here; hawala funds; funds earned by artists/ entertainment industry/ sports people and stashed away abroad, etc. When you want to indulge in adharma, hundred ways are open.

Do you feel international terrorist organisations use the tax-haven route to send across money to finance their nefarious activities?
Even our national security advisor, M K Narayanan, has spoken about it in Berlin.
You recently wrote, “Under pressure from federal authorities, Swiss bank UBS is closing the hidden offshore accounts of its well-heeled American clients, potentially allowing their secrets to spill into the open.”

Do you feel the government of India should also demand all the Indian black money in Swiss banks back?
Of course, India should and must act. We are not a banana republic.

How can the government go about doing this?
By putting it on the global agenda. Put it in G20. Put it in IMF. Put it in Egmont Group. Also take a lead among all developing countries. Support US/ German/ French efforts.

Do you feel Swiss authorities and other tax havens will cooperate with us on this issue if we take the initiative?
It is not our pressure but that of the US, which will make them cooperate. When a family is in deep financial crisis, it tries to look at the small amount saved under the sugar jar by grandma. In the same way, developed economies are desperate for every dollar.
Even if we do not act due to their efforts, the list of crooks may be out. Then, we will be in a dangerous social situation since the who’s who of India will be there. Instead, we should get the list and get the funds and decide on the steps to sterilise it and the punishment to be given out, etc. Otherwise the world will laugh at us. We will be worse than a Nigeria (Sani Abacha) or Phillipines (Markose).

Do you feel the government will do this, given that a lot of the black money belongs to politicians?
Public pressure will make them do it. Plus, the evolving global situation against tax havens also might act in our favour. The money belongs to the poor farmers and unorganised workers.

Do you see businessmen applying pressure on the government to thwart any attempt to get back this money?
The world situation is such that Indian businessmen will want to bring it back now, given the attractive returns in India. The entire proprietary notes route to invest in the stock market was conceived for that.

You wrote in one of your columns that the German foreign intelligence agency BND got the names of 1,400 clients of the Liechtenstein-based LTG Bank who were suspected tax evaders. Of the 1,400, only 600 were supposed to be Germans. Do you think the rest would include Indians? Has the Indian government approached the German government for the list?
Indian names will be there. Our tax evaders and crooks are like Maha Vishnu, present in all continents and all tax havens, in the sea, on the earth, in the air. But our government has been lukewarm in its response to this issue. It should have immediately dispatched senior officials and the finance minister to get the names.

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