$27 Billion flows out illegally every year from India
The report comes amidst a confrontation between Congress and BJP over the latter's promise to bring the illegal billions stashed abroad back to India. While Congress has accused the BJP of exaggerating the issue by distorting facts for partisan ends, the BJP has returned the fire with full force, accusing Congress of ignoring the issue.
Raymond Baker, GFI Director, said, "It was not just India's problem. In 2006, total outflows from developing countries outpaced incoming official development assistance (ODA) by a ratio of 10 to 1. This means that for every $1 in ODA a developing country received, $10 was lost due to illicit financial outflows," he said.
With the issue of money taken illegally abroad and stashed in tax havens gaining prominence because of the feeling encouraged by the global slowdown, the days of secret banking are set to be over. The consensus was reflected in the recent meeting of G-20, and has been strengthened by the promises of Swiss authorities to cooperate with demands, provided they are backed up by specific details, for investigation into accounts in banks within their jurisdiction.
In India, Supreme Court has taken up the matter following a Public Interest Litigation (PIL) by a group of well-known citizens.
The GFI report estimated that total illicit capital flight from developing countries was as high as $1 trillion per year during 2002-06. The illegal outflows involve activities such as corruption (bribery and embezzlement of national wealth) and proceeds of licit business that becomes illicit when transported across borders in violation of laws and regulatory frameworks.
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