Nearly $95 billion (Rs 6 lakh crore) were 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 released on Tuesday 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 have been put to use for various corrupt or criminal activities once parked in foreign safe havens.
Overall, just in 2012, nearly a trillion dollars ($991 billion) in illicit capital flowed out of developing and emerging economies, the study noted. This is an all-time high. Between 2003 and 2012, the illicit outflows add up to a monstrous $6.6 trillion, averaging nearly 4% of the developing world's GDP .
Black money has been a major issue roiling India in the recent past. The new Modi government had promised it would bring back black money stashed away in foreign banks in 100 days. While investigations are inching forward, opposi tion 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 each year. The GFI study says illicit outflows are growing at an inflation-adjusted 9.4% per year -roughly double the global GDP growth over 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 multinational corporations 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 International Monetary Fund 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 longtime authority on financial crime. The $991.2 billion that flowed illicitly out of developing countries in 2012 was greater than the combined total of FDI ($789.4 billion) and net official development assistance ($89.7 billion), which these economies received that year. Some of the poorest regions of the planet -south Asia and subSaharan Africa -have very high rates of foreign outflows, depriving them of much needed capital for basic amenities and services.
