Black money – a most discussed topic 2011

New Delhi: The government went into an overdrive to deal with the menace of black money and promised a White Paper on the issue as demands for bringing back the ill-gotten wealth stashed abroad gathered steam in 2011.

In the backdrop of various estimates on the quantum of such illegal funds, the government constituted expert panels to make a realistic assessment of black money and suggest ways to curb its generation.

The unconfirmed estimates of black money stashed in Swiss and other banks varies from USD 350 billion to USD 1,900 billion.

Finance Minister Pranab Mukherjee announced in Parliament that a White Paper will be issued on black money, while disclosing that government has received 36,000 `pieces` of information with regard to Indian account holders in banks abroad.

Social activists Anna Hazare and Yoga guru Baba Ramdev began hunger strikes against corruption and black money and demanded a strong anti-corruption legislation and to bring back black money stashed abroad.

As protests attracted huge crowds with people from all walks of life and classes thronging the venues where these agitations took place, the issue of black money acquired center-stage and became the hot topic of debate across the social media and television studios.

As the issue reached a boiling point at home, Prime Minister Manmohan Singh urged the G-20 nations during the summit in Cannes, France to send a strong message to control the `serious problems` of tax evasion and illicit flows that have grave bearing on the developing nations` future.

The Prime Minister said the "G-20 countries should take the lead in agreeing to automatic exchange of tax-related information with each other".

Meanwhile, the amended Indo-Swiss Double Taxation avoidance agreement (DTAA) also came into effect in October, a development that will enable India to seek banking information.

The revised treaty would allow India to seek information on cases related to tax evasion. Under the earlier pact, India could only seek bank details in relation to tax fraud cases.

In order to create an appropriate framework for exchange of tax-related and banking information, India started renegotiation of double taxation avoidance agreement with 75 countries and inked tax information exchange agreement (TIEA) with several new jurisdictions.

The Centre has adopted a 5-pronged strategy to deal with the gnawing problem.

This includes bringing back black money stashed abroad, joining global crusade against black money; creating an appropriate legislative framework; setting up institutions for dealing with illicit funds; developing systems for implementation; and imparting skills to manpower for effective action.