'White Paper' on black money placed in Parliament by Pranab

Discussion in 'Economy & Infrastructure' started by ejazr, May 21, 2012.

  1. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    http://www.newstrackindia.com/newsd...ack-money-placed-in-Parliament-by-Pranab.html

    New Delhi. May 21 (ANI): Finance Minister Pranab Mukherjee on Monday tabled the much-awaited 'White Paper' on black money in the Lok Sabha, which provides information on black money stashed in safe havens abroad.

    Mukherjee had earlier in budget speech promised that he would present a white paper on black money in the Budget Session itself.

    "I will try to give all the relevant and possible information," he had said in the Lok Sabha.

    The white paper is likely to contain the report of Black Money Committee set up in May 2011, under the chairmanship of Central Board of Direct Taxes (CBDT).

    Mukherjee had earlier said the public discourse on the issue of corruption and black money has come in the forefront with the active participation of the civil society and parliamentary institutions in the past year.

    "Two issues have been highlighted in this debate. First, several estimates have been floated, often without adequate factual basis on the magnitude of black money generated in the country and the unaccounted wealth stashed aboard. Secondly, a perception has been created that the Government's response to address this issue has been piecemeal and inadequate. This document seeks to dispel some of the views around these two issues and place the various concerns in a perspective," said Mukherjee.

    "The 'White Paper on Black Money' presents the different facets of black money and its complex relationship with policy and administrative regime in the country. It also reflects upon the policy options and strategies that the Government has been pursuing in the context of recent initiatives, or need to take up in the near future, to address the issue of black money and corruption in public life," he added.

    Mukherjee said there is no doubt that manifestation of black money in social, economic and political space of our lives has a debilitating effect on the institutions of governance and conduct of public policy in the country.

    "Governance failure and corruption in the system affect the poor disproportionately. The success of an inclusive development strategy critically depends on the capacity of our society to root out the evil of corruption and black money from its very foundations. Our endeavour in this regard requires a speedy transition towards a more transparent and result oriented economic management systems in India," said Mukherjee.

    "The steps taken in recent years for simplifying and placing the administrative procedures concerning taxation, trade and tariffs and social transfers on UID based electronic interface, free of discretion and bureaucratic delays, are vital building blocks of the approach for tackling corruption and black money in our country," he added.

    The Finance Minister said the government has in this past year brought five bills namely, the Lokpal Bill, the Judicial Accountability Bill, the Whistle Blowers Bill, the Grievance Redressal Bill and the Public Procurement Bill, which are at various stages of consideration by the Parliament.

    "The institutionalisation and expansion of information exchange network at the international level is a major step in curbing cross-border flow of illicit wealth and in facilitating its repatriation. While these measures will set the tone for an equitable, transparent and a more efficient economy, there is much that we could do, both individually and collectively, to strengthen the moral fibre of our society," said Mukherjee.

    "I would have been happy if I could have included the conclusions of reports of three premier institutions that have been tasked to quantify the magnitude of black money. These reports are likely to be received by the end of this year. However I have chosen to present this document now in response to an assurance given to the Parliament. Hopefully, it would contribute to an informed debate on the subject and a more effective policy response as we move forward," he added.

    The Bharatiya Janata Party-led opposition had earlier mounted pressure on the government to provide names of the defaulters in the case. (ANI)
     
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  3. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    Seven Things You Should Know About the White Paper on Black Money - India Real Time - WSJ

    The Indian media were a disappointed lot on Monday. Big ticket headlines – the size of the so-called black economy or names of prominent personalities – were missing from a much-anticipated report on illicit money tabled by the government in Parliament.

    Many saw the 108-page report, titled “White Paper on Black Money,” as little more than a way for the government to show it is committed to tackle black money.

    It left out many details observers were hoping it would include, like estimates on the size of India’s black economy.

    Here are a few things you should know about the government’s white paper on black money:

    What is black money? Black money is income that is not declared to tax authorities. This can be generated through entirely legitimate business or through crime and bribery. Tax evasion is the main reason that leads to the generation of black money.

    How big is the Indian Black Economy? The report does not offer conclusive data on this. The report says it’s difficult to estimate right now how big it is and that estimates floating around in public domain are baseless exaggerations. Wait for the report of the tax department and government-funded think tanks, which is due in another four months or so.

    How much of it is stashed abroad? In Swiss banks the deposits by Indians total 92.95 billion rupees ($1.7 billion), the report says. But all of this could not be black money. Some could be from legitimate accounts.

    How is black money generated? The report says that taxes are most commonly avoided through the manipulation of account books by either not reporting purchases or sales or under-reporting production.

    A more complex way of avoiding taxes is through transfer pricing – this relates to how companies trade among their affiliates across geographies. It also has to do with how they plan trade with the aim of shifting profits to low-tax countries, thereby reducing their worldwide tax payments. This, the report says, has become the biggest tool for generating and transferring black money in terms of the sums that are generated through his process.

    The illicit money parked abroad may come back to India as foreign direct investment via low-tax countries and loans. It is possible that a large amount of money transferred outside India might actually have returned through these means, the report says.

    The report also alleges that a lot of black money is generated through the rigging of share prices and the routing of black money parked abroad back to Indian markets through so-called “Participatory Notes.” (These are tools commonly issued by clients of foreign institutional investors who do not want to disclose their identity to Indian regulators.)

    How is money laundered? It’s difficult for undeclared profit to enter the “white,” or legal, economy. But there are ways of doing that. It’s no big surprise that the report identifies the jewelry industry and real estate as two sectors where plenty of black money is stashed away.

    In India, almost all jewelry transactions are in cash and tax is levied only on cash purchases of 500,000 rupees ($9150) or more. This means most of the many such transactions remain unreported. Besides, precious metals are easily tradable and seen as a safe investment since their value steadily increases.

    In most of the real estate transactions, which do not involve government agencies or direct sales by big developers, it’s difficult to verify whether the true value of the property is actually being reported. This leads to both generation and investment of black money. In property transactions in some of the bigger cities and towns as much as 80% of the payment is made in cash.

    What about the informal sector and agriculture? In India, income from agriculture is not taxed and some of the income from activities related to the sector is not reported, since this is required but hardly done. The sheer task of keeping an eye on them is beyond the means of the tax department.

    The presence of large unorganized sector also contributes to the process generating black money. These are typically small entrepreneurs who have little or no access to the formal banking system. They borrow from their acquaintances to set-up businesses and take loans from the informal credit market. They also don’t understand tax laws or have professional help.

    Is tax amnesty an option? The report said this is one of the options the tax department is considering to lure black money from abroad and back to India. It is uncertain whether the government would go through with this, since the report notes that public opinion is generally against it.

    The report mentions this as an option for encouraging black money to return to India. Other suggestions include greater international cooperation on detecting and controlling tax avoidance and strengthening anti-money laundering legislation.
     
  4. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    The full report is available here and is quite long

    http://pib.nic.in/archieve/others/2012/may/d2012052101.pdf

    As media reports mention, it doesn't have the GoI estimations of the Black money which will be reported in another four months. But it did have estimation from a few International organisations including GFI which puts illicit outflows at around $450 Billion US since 1948 in today's value. Although it does also say that much of it might have come back in as FII through Maritious and Singapore.
     
  5. lcatejas

    lcatejas Regular Member

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    Its all bullshit ... as#$^&$ they are not serious to take any strong step .. only make fool of public...
     
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  6. Christo

    Christo New Member

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    Anti Money Laundering

    Whenever the project paper come in the parliament, So important paper can be lost to their, In the politics their some body has been made it black.

    Anti Money Laundering
     
  7. sob

    sob Moderator Moderator

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    One thing is very clear from the White Paper. the tax evaders are ahead of the Govt. and have started shifting money out of Swiss Banks into Cayman Islands and other Banking Heavens.

    The other thing that comes out is that there is no political will to go after the illicit black money. Even if there are US $ 25 billion in Swiss Banks, it is high time they are brought back. Our economy needs all the hard currency in these difficult times.
     
  8. lcatejas

    lcatejas Regular Member

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    Whole country know its a white paper (Eye Wash)... forget to put the names of culprits (Mostly from Govt. Congress and party ) ... govt don't want to root out corruption they only read written bhasan (Mostly Puppet MMS) '' We are trying our best to root out corruption helping account holder to shift there black money to other accounts " people of India are fools .. they only know candle march... they will forget next day.. and we have our owned stupid media to help us.
     

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