Black money rot, Centre must act

The fresh cache of information about Indians who hold money in foreign accounts is yet another reminder of the task before the Indian state to unearth untaxed wealth and to bring to book those who stash their illicit wealth away in tax havens. Black money has been at the centre of political debates in the country for long. But the state has mostly failed in its task and even the government which came to power with the promise that all black money would be retrieved within 6 months has been looking for excuses and asking for time. Over 500 Indians have figured in the list of names contained in 11.5 million documents leaked from the Panama-based law firm Mossack Fonseca which provided facilities to companies and individuals all over the world to park their wealth in tax havens. More names are being revealed. They include industrialists, film stars and prominent persons in other fields. Mossack Fonseca is not the only firm that provides such services. There are many others and even bigger ones.

The disclosure does not mean that all the accounts contain illegal and untaxed wealth. There are legal ways of taking money out of the country, like the Liberalised Remittance Scheme, which allows Indian citizens to transfer up to USD 2,50,000 a year to foreign accounts. But there is confusion over the rules that govern the transfer. It is a fact that there has not been much regulatory supervision or monitoring by state agencies of such transactions. It is not known how many of the accounts which have now come to light are legal. Some of those who figure in the list have made denials and some others have maintained silence. The general inclination would only be to believe that most or many of the accounts which have now been revealed were created and are being held in violation of the letter and spirit of the law.

The government has appointed a multi-disciplinary team to investigate the revelations made in the Panama papers. But the record of such investigations does not inspire confidence. The Special Investigation Team on black money appointed by the Supreme Court has said that it did not get full cooperation from all government agencies in its investigations. Finance Minister Arun Jaitley has again warned of strong action against those on the wrong side of the law. He has another opportunity to make good on his promise. The major journalistic effort to access the names and make them public deserves praise too, and it shows the need for global action in tackling the problem of black money without borders.