APN News

  • Sunday, September, 2021| Today's Market | Current Time: 03:40:45
  • By Geetha V P

    It is astounding. The ill-gotten riches from India stashed in one single foreign bank amounts to 115% of our GDP and more than 7 times of the

    Swiss Bank: A safe heaven for any money

    country’s external debt.

    According to a Swiss Banking Association report India tops with $1,456 billion among the  list of countries having bank deposits in the territory of Switzerland followed by Russia ($ 470 billion), UK ($390 billion), Ukraine ($100 billion) and China ($ 96 billion). According to Global Financial Integrity in the last five years alone about $ 325 billion murky money from India has flown into this tax heaven.

    In fact, our economy is worth $1300 billion and external debt during last fiscal was a little above US $ 229.9 billion which is almost 22.0 per cent of the GDP.

    According to an analysis if all these illegal deposits abroad come back to India, the country’s enormous external debt can be repaid in 24 hours.  Even after paying the entire foreign debt, we will have surplus amount, almost 5 times larger than the foreign debt.  The interest earned for this surplus amount will be more than the annual budget of the Union Government.  In short the country can survive own its own even without collecting any taxes. That is the sheer size of the money flown out of India and hidden in various tax heavens.  And if this booty from India siphoned to the Swiss bank is distributed among 45 crore of our poor brethrens will get at least Rs 1, 00,000 each.

    Recently, due to international pressure, Swiss government agreed to provide the names of the account holders on formal from concerned governments. It seems Indian administration is yet to act on this. According to travel data available about 80,000 people fly to Switzerland every year, of who 25,000 travel almost frequently.

    According to Dev Kar, a former economist at the International Monetary Fund,  ”If India would have avoided the flight of capital over such a long period, it would have enabled the country to either contract less debt or pay off the existing debt at the time,—-“. The outflow ”represents a staggering loss of capital.”

    Kar further said  illicit financial flows out of India have grown at 11.5 per cent a year, debunking a popular notion that economic reforms that began nearly two decades ago had tempered the creation and stashing away of black money overseas.

    In fact, the problem has grown in the years after the reforms kicked in. Nearly 50 per cent of the total illegal outflows occurred after 1991. Around a third of the money exited the country between 2000 and 2008.

    Indian is not the only country from where wealth is flowing to the tax heavens. In March 2005, the Tax Justice Network (TJN) published a research finding that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe. The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Further, augmenting these studies of TJN, Raymond Baker — in his widely celebrated book titled ‘Capitalism’s Achilles Heel : Dirty Money and How to Renew the Free Market System’ — estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.

    It is further estimated by experts that 1 % of the world’s population holds more than 57 % of total global wealth, routing it invariably through these tax havens. How much of this could be the contribution from India?

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