Why Not Address the Practical Difficulties of Retrieving the Illicit Assets Held Abroad by Indian Citizens
In his forward to the government’s white paper released on May 16, the finance minister acknowledged that black money has a “debilitating effect” on governance and the conduct of public policy in India. The paper’s review of the work done at Global Financial Integrity (GFI) on illicit financial flows from the country is clear and comprehensive and we commend the government’s efforts to develop policy measures to curtail the generation and cross-border transmission of these flows. Ongoing discussions among and between various stakeholders in the world’s largest democracy can in time coalesce public opinion on the required policy measures.
It is encouraging to see the zealous enthusiasm that has surfaced in India over the past few years on eliminating black money or illicit financial flows. While many other countries are taking modest steps to curtail illicit flows, India has gone ahead to make the issue one of pressing national importance. Applause is due to the nation, while more work remains tobe done.
India has acted strongly to pressurise foreign banks into accounting for and in the future returning illicitly-acquired assets to the country. This is a worthwhile goal. But any asset recovery will be a long-drawn process and is likely to result only in a fraction of illicit dollars being returned. A more productive outcome can be to focus on stemming future illicit financial flows, both domestically through mechanisms such as anti- corruption legislation and by applying pressure on the international community.
Raymond Baker will meet with high-level government officials, civil society organizations, journalists
NEW DELHI, India; Global Financial Integrity (GFI) Director Raymond Baker will travel to India this week for meetings with government officials, journalists, and civil society organizations. Mr. Baker will also deliver remarks at a press conference Friday afternoon.
The budget 2011 is one among a series of budgets in the medium term that seeks to consolidate the Central government’s fiscal deficit and this is in line with what I had expected. Fiscal consolidation is mainly driven by revenue growth and steps in that direction are crucial in order to reconstitute fiscal space.
Fiscal space means the government can launch a well-targeted expansionary expenditure policy so as to boost investments in infrastructure. Massive increases in infrastructure are needed in order to raise India’s potential rates of economic growth in the long run and to achieve better balance in growth rates among India’s states. The Budget seems to recognise the need to boost growth rates in some lagging areas where there is widespread discontent that is driving certain insurgency groups like the Naxalites. Better balance in economic growth will help to achieve national cohesiveness.
Writing about India’s booming economic performance and growth potential has become its own cottage industry over the last several years. Indeed, a report out this week predicts that India will become the world’s fastest growing economy by 2012 and, by 2030, will likely be the globe’s third largest economy behind China and the United States. From its educated work force to its embrace of technology and the likelihood it will be among the leaders in developing “green” businesses, it appears that India – other than the Commonwealth Games – can do no wrong. But the rosy picture has a dark underside that must be addressed if India’s stagnant income inequality levels are to be overcome.
Examines Role of Tax Evasion, Corruption, Trade Mispricing
WASHINGTON, DC — “The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008,” released today from Global Financial Integrity (GFI), estimates that tax evasion, crime, and corruption have removed gross illicit assets from India worth US $462 billion. The report also finds that the faster rates of economic growth since economic reform started in 1991 led to a deterioration of income distribution which led to more illicit flows from the country. Moreover, the report finds that the poor state of governance is reflected in a growing underground economy which in turn has fueled more transfers of illicit capital from India. This analysis is cast in terms of a pre- and a post-reform period spanning a total of 61 years since independence.
New GFI Blog Post Explores Link between Corruption, Poverty, and Violence against Whistleblowers in India
Post features advance look at numbers from upcoming GFI report on illicit financial flows from India; country lost over US$125 billion in illicit outflows between 2000-2008
WASHINGTON, DC – Following a Washington Post story published yesterday about recent violent crimes in India against whistleblowers, Global Financial Integrity published a post revealing new numbers from an upcoming GFI report on illicit financial flows (IFF) from India and explaining linkages between IFFs, poverty, corruption, and crime.
WASHINGTON, DC – 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 visit Mumbai, Pune, Jamshedpur, Calcutta, and Delhi over the course of a three-week tour of India starting Monday, June 1st.