Illegal Indian money in tax havens: The way we debate it

Illegal Indian money in tax havens: The way we debate it

The debate, or the lack of it, in recent days, on the important issue of our illegal money kept in Switzerland and other tax havens, has been rather interesting.

Many in the mainstream media have kept quiet, with hardly an editorial or analysis. TV channels, particularly the business ones, are silent. The Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry, which lobby for the interests of big business, are observing eloquent silence, too.

In the last few months, global newspapers, particularly the business publications such as Financial Times, Wall street Journal and The Economist, have been full of articles and analyses about tax havens and the determination of the USA and other Organisation for Economic Cooperation and Development countries to tear off the veil of secrecy over these tax havens, particularly Switzerland.

I have been following these developments for 15 years now. I have been arguing against tax havens and suggesting that we make plans to get our money back. I have also included this as a module in my finance course for many years. The latest is my column in this paper on March 4 on bringing back our illegal money from Swiss banks.
I now find that CPI(M) in its manifesto has included the issue of our illegal funds in foreign tax havens and so also CPI, JD(U) and SP. BJP has also included it in its manifesto and L K Advani has even held a press conference on it.

After all this, one would have expected a major informed discussion to take place on this vital issue. However, it has taken peculiar turns in our politically twisted atmosphere.
To bring back clarity and focus, I would like to submit that there are three issues here: The total amount of illegal money stashed abroad; the amount of illegal money kept by Indians in various tax havens; and the amount kept in Switzerland.

On the first issue, developed economies are taking appropriate actions.

On the second and third issues, we are debating the need to provide exact pin code address and permanent account numbers of the culprits before we even debate.
As for the silence of our media, we can surmise that hedge funds etc have invested in many of these companies and it could be through or from these tax havens. That might explain the eloquent silence.

But as a Tamil proverb outs it, can a pumpkin be completely hidden in a katori of curd rice?

The Swiss vaults will eventually be opened up, with or without India’s role. If it happens as a “collateral benefit” to India, it will make us a banana republic worse than that of Sani Abacha’s Nigeria.

The choice is ours. Either we play our necessary role in the global forums and are a facilitator to get back our money, or become a laughing stock when the who’s who of India list is published in some American or European news portal.

uch Q� ho� �� his and expects the Central institutions to fend for themselves. There is a need for buildings and various other physical infrastructure in all the Central institutions of higher learning, leave alone the lower levels of education.
It is also surprising that the traditional rebels without a pause, namely the Left liberals, are totally silent on this.

The usual Marxist crowd berating US imperialism, etc is also silent. May be the recessionary imperialism is not to be bothered about. The academic community is silent and some may be positioning themselves for future opportunities.

In the context of starving Indian institutions, gifting nearly Rs 50 crore to institutions in the UK/US is, to say the least, callous and may be construed as the result of the embedded colonial gene in our systems. The courtiers and family retainers may be already crowding around relevant ministries and power centres to get the positions, but that does not justify this subsidy.

Due to our distorted Nehruvian socialistic thinking, we believe that government is the embodiment of wisdom since it can tax and provide subsidies. We still live in the era of Kings where the whims and fancies of the Chakravarthi could get huge gifts to the courtiers and other foreign poets/ scholars. All one need do is stand in the queue and sing praises — particularly in this Dhanur month. Of course, if your colour is white, then just stand, not necessarily in the queue. Gifts will be bestowed and you will be profusely thanked for your presence and acceptance of the same.

There are many NRIs and Indian business groups who could have provided this subsidy/ alms to Harvard, but that was not the deal. Harvard I presume has arm-twisted the Government of India to get the funds to minimise the impact of its losses on the hedge funds. Anyhow, Indian government is the best hedge against such situations; due to the colonial hang-up and because we think Americans have done a great favour to us.

That is the reason our Ambassador to the USA, Ronen Sen (of the ‘headless chicken’ fame) profusely thanked the president of the Harvard University for accepting the gift.

We all should be very happy that Harvard condescended to accept our cheque since each of us was worried they may not!

Will the Indian mind ever get de-colonised?


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