$27 Billion flows out illegally every year from India

$27 Billion flows out illegally every year from India

By SiliconIndia   |   Monday, 27 April 2009, 03:05 Hrs   |    44 Comments
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$27 Billion flows out illegally every year from India
New Delhi: India has been ranked fifth in a list of 160 developing countries that are suffering from the outflow of huge amounts of money via illicit channels. According to Global Financial Integrity (GFI), a U.S.based organization who created the list, total illicit financial outflows from India during the period averaged from a low of $22.7 billion to a high of $27.3 billion per year. China topped the list of countries for illicit outflows with $233 billion to $289 billion, followed by Saudi Arabia ($54 billion-$55 billion), Mexico ($41 billion-$46 billion) and Russia ($32 billion-$38 billion).

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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Reader's comments(44)
1: Really surprising figure. Yar I don't know why now, we are made shouting.........? our all nationalist know this thing. jab BJP ki sarkar thi tab bhi great amount outflow tha aur ab bhi hae. then why we anger? You tell me, whats the function of Bank? they give the funds to private authority or person for developement or construction on loan basis then after they recover with interest, & many other task done by Bank. Ultimately our country amount goes to our country developement, so why not indian bank adopt the same as swiss bank function. they are not shown any details to any Govt. concern. than after you see how much amount comes from abroad to here, Yar no body wants to share his or her money to any body. they wants to earn money and this froud Govt. get the tax. WHY? I does not wants to give a single amount to any body from my earn money. and I think no body can wants. I suggest that a authority has made who responsible for the DEVELOPMENT of our Nation, & our Bank give the loan to him, and ultimately our amount can be use for our nation as well as ourself.
Posted by:Vinod Tiwari - 29 Apr, 2009
2: Why to talk about the money outside india? If Indian bank accounts as well as property registration details of all Government/public sector employees like port-trust are thoroughly scrutinised, we can get more funds to run our government easily for 50 years. For example, it was in yesterday\'s TV news that a Woman passport officer who was arrested on corruption charges at Chennai was found having 50 crores of wealth accumulated. Similarly, I heard about a person who is working as a class-iv in chennai Port-trust has built row houses in East Tambaram area worth a crore and running a successful money-lending and construction businesses too. It\'s democracy! No need to go after SWISS Banks, if a proper investigating agency (Other than CBI) is appointed to look into the numerous accounts and property held by these public persons, surely India can provide social security to all the poor people and also we can overtake USA in terms of per capita income within a period of 1 year.
Posted by:hopesneverdie - 29 Apr, 2009
3: Oh my God.............oh ho......
Kya hua hamare netaon ko........
isme big lobby of officers and big lobby of industrialist bhi hay..
aur hum bhi maante hein American survey.......KYONN..
Yeh figure kabhi bhi thik nahi ho sakti...
pl c......c....and check....
if it is write then say..
one year amt as per survey......$270 crore Rs 13500 crore
Five year amt (Before BJP Govt)..$1350 Cr Rs 67500 crore
since independece of country.. $ 17010 Cr Rs 850500 crore..
oh..my God.............u r great...otherwise wah re SURVEY.....
by this amt We can be able to procure all world in India's hand..
Think again......


Posted by:ykgarg - 29 Apr, 2009
the statistics if it genuine, it is alarming and we the people should protest and overthrow the corrupt government through ballot and start an revolution for the presidential form of the government and two party system and throw all the aya rams and gaya rams
GN Murthy Replied to: ykgarg - 01 May, 2009
5: I am really surprised by the figures being floated around about the money being siphoned from India without any analysis by any media or economist. All kinds of figures are being thrown in. Someone mentioned the figure of $5 trillion since independence. Another figure is about $25 billion every year. If you just try tallying these two figures, it does not match up. No one has given the reference to total budget of India since independence or in the last 10-20 years. I do not find the figures any where close to realistic figures. From where the money has been taken? Can greater money be taken out of the country than its budget?
To me it appears either a political stunt or a strategy of Western media to tarnish the image of fast developing India.
Can someone help crunch the number and come up with some realistic numbers?
Posted by:Amulya Gurtu - 27 Apr, 2009

I agreed with u but money is going outside very fast.....may not be correct figure but it is a big amount..
do u agree.
only netas but big industrialist and officers are there......c this..
when america can take action on the subject....then...why we can not...
because nobody is intrested to take the action agst anybody..
it is going since 60 years...
this is the bad luck if india..
ykgarg Replied to: Amulya Gurtu - 28 Apr, 2009
I thick the supreme will take this to the ultimate end and direct the government bring to book all the corrupt netas, bureaucrats , business people, underworld dons and all others and spend the money arrived at for linking various development project for rural india and also also linking all rivers which is a project which the congress never implements.
GN Murthy Replied to: ykgarg - 01 May, 2009
8: This is one good reason as to why I oppose the idea of more borrowing from the World Bank.
Posted by:Rudra Rebbapragada - 27 Apr, 2009
the supreme court should ban all borrowings from various agencies and instead get all the black money stashed by all good persons of this great country and use it for various development projects to be given / awarded to selected NGO's and definitely not govt agencies or else the money goes back again
gn murthy Replied to: Rudra Rebbapragada - 01 May, 2009
10: pehle angrez, aur abhi ye chor neta lok.....
Posted by:sanjyot shah - 27 Apr, 2009
it is say like this....
Pehale Mughal.....firr angrej.......aur abhi yeh neta......
wah re loksahi............
ykgarg Replied to: sanjyot shah - 28 Apr, 2009
12: After resding this article and readers comment, I would like to add my two cents as well, that do not forget that some of the NRI's are also bringing money to their resident countries, by selling their assets in India, that too without paying taxes, usually through money laundering. Can Indian authorities somehow stop that !
Posted by:Rachna - 27 Apr, 2009
Do you believe that NRI is made that asset by the money which is earned in india. I was earning Rs 4000/- in india But I am earning more than 60,000 in aborad . So how could I assume the asset in india is earned to be taxable ?
Paritosh Replied to: Rachna - 27 Apr, 2009
it is not good...
pl mind ur language.......
cool pl.......................
ykgarg Replied to: Paritosh - 29 Apr, 2009
good point there rachna
sanjyot shah Replied to: Rachna - 27 Apr, 2009
16: There is over $5 Trillion accounted for since the British left India. We are a society with very poor principles. We tolerate and enjoy seeing children suffer and we encourage servitude at all levels. In every office and in all Indian companies, if you don't kiss up to your boss (man or woman), you are doomed as favoritism based on years of brown nosing is awarded over bright and talented people - this is the insidious nature of our society.

Indeed, the wealth abroad is horded there because the government can not guarantee the sanctity of the wealth in Rupees nor will it allow people to enjoy it either. We have all the negative ingredients of the Gita.

Gandhi never envisioned such a warped state nor the deep rooted levels of corruption which hobbles this country. Hell, we have criminals in parliament who are immune to prosecution because they are elected.

Can we repatriate the wealth - not by legislation. The only way to encourage people to keep and spend the wealth in India is to truly make a 90 degree turn where the rule of law is governed on just principles and people are willing to give up the babu raj.
Posted by:Verk - 27 Apr, 2009
$5 Trillion averages to about $82 billion every year since 1947. Where as the latest figure is for about $25 billion. Are you suggesting that earlier huge money had gone out of India as compared to present? Secondly, have you totalled up India's budget since independence and what %age if so called $5 trillion amount? Is it not your firm belief, like most of independent Indians, that any figure published in USA / UK is taken sacrosanct without analysis. Please do the math with India's budget or from tax collected / paid etc before believing any figure published by political parties during election or by Western media. These figures do not make any sense to me.
Amulya Gurtu Replied to: Verk - 27 Apr, 2009
18: We all had become cynical regarding our neta's .
when we came to hear about the swiss bank deposit what we did ?Nothing .The Swiss bank had got billions of money of Indians ,from where it came .
Should we only balme our political leaders but there are others in the line up various IAS IPS and other beauracracts what about them.
Posted by:Anupam Rout - 27 Apr, 2009
well point Anupam..
i m agree with u...
not netas but officer lobby moreover big industralist are also there...

ykgarg Replied to: Anupam Rout - 28 Apr, 2009
20: This will not work. First of allchnage the ssytem in the elction and remove teh Prez post VP post or PM keep a lean team. The currentPrz is useless with criminal back ground wanted to stat IIT for women in her native place. Willnot wok with prez
Introduce card system and remove cash transation.Integrate all information to central one with bio metric At least in the future things will be OK
Posted by:Ganesh - 27 Apr, 2009
21: The ensuing elections are predicted to lead to a hung parliament. A tremendous opportunity for our President is available to proclaim ordinance banning all parties and holding all politicians as non entities to the consequence. The President should declare a state of emergency to combat law and order situations due to instigations from erring politicians. The power to administer, and run the interim Central and State governments should be entrusted to highly competent and knowledgeable Secretaries of various portfolios throughout the country. Without prejudice, all assets of the politicians should be frozen and public warned against any transactions.

A high power committee consisting of stalwarts, celebrities, top industrialists, economists, medical & bio technology fraternities, Chartered Accountants, Journalists and media should be constituted by the President, selection based on Integrity and sustained dedicated work in the interests of our nation. A few who could be included are Mr. Ram Jethmalani, Mr Narayanamurthy, Ambani brothers, Mr. Premzi, Mr. Ratan Tata, Mr. Sorabjee, Dr. Reddy, Mr. Ravi Shankar of Art of living, and Dr Devi Shetty. They must initiate enquiry into all politicians, irrespective of party affiliations, who have amassed wealth from inappropriate known sources of income and also those who have a criminal record and evading arrest or prosecution. This top level committee should be empowered by the President to take help from the governments and bodies all around the world, to obtain details and unearth the ill gotten monies stashed abroad in designated foreign banks. An opportunity to voluntary disclosure by the victims can also be considered, in case of those who want to come out clean. Once the details are obtained the Judiciary should initiate proceedings into such irregularities and prosecute the guilty politicians. The monies unearthed should be confiscated and utilized to assist our ongoing economy reforms. Their assets should also be confiscated in found inappropriate.

The ambitious project started by LEAD INDIA comprising of young citizens, should accelerate its presence and should effectively take lead in the governance of a new and innovative policies which should make every citizen proud of this remarkable turnaround. Lead India could also gain by constituting a committee of elderly distinguished persons and seeking advice, from time to time, till such time they can manage on their own.
Posted by:Vasanth - 27 Apr, 2009
It appears to be a good suggestion but you forget one thing Vasanth, this president is a Congress worker controlled by congress high command and so if any action is taken it will be against other politicians and persons not in good books of the congress high command! All congress goons will be free and that means no effect at all!
ashok kothare Replied to: Vasanth - 28 Apr, 2009
23: When things are moving for the positive, let it . Instead of blaming what has taken place earlier, isn't it better to encourage the ones who take steps in the positive direction, if it helps the country ? irrespective of the party affiliations any traitor should be taught serious lessons.
Posted by:SHANKAR GURU CN - 27 Apr, 2009
24: Stashing away valuables is a common human nature to feed & sustain the bad times. The disturbing point is, how to render more teeth to our enforcing agencies, have a common database of citizens, adopt transparency in operations (both financial & physical, implement egovernance and a uniform code of law across the country.
Posted by:AMI - 27 Apr, 2009
25: I think Every one has become cynical about the Politicians and such despair will only help them go Scot free.Let us hope some positive steps are taken and I wish all educated citizens are more vigilant rather than saying that " Nothing will be done".
Posted by:Mohan - 27 Apr, 2009
26: what was Advani doing when he was home minister and all powers? Why he did not made an attempt to bring back the illegal billions stashed abroad back to India. He wants some issues to use it for his benefit in the elections.
Posted by:Babu Bylappa - 27 Apr, 2009
At least he dare to raise this issue
ganesh Replied to: Babu Bylappa - 27 Apr, 2009
Mr.Babu, There is no point in asking "What Advani was doing when he was minister" as this will not take us any where. As a Citizen we should demand collectively that what he Promises now, he is fulfilling.What is the use of talking about past?
Mohan Replied to: Babu Bylappa - 27 Apr, 2009
imagine how much money and treasure has taken away during British raj can any one identify and do some survey to arrive at a figure

i dont think we can get any figures of the mughal raj period
GN Murthy Replied to: Mohan - 01 May, 2009
30: This is a good positive step by BJP to stop curruption from indian politics. Govt should bring strong laws so that corruption can be minimized.
Posted by:Sohail - 26 Apr, 2009
31: It is a useless venture and waisting the TIme of public and distracting the attention of Voters,. Can Any BJP or Congress led Govt bring it back? IT is a well known fact that it is all politicians money , taken as bribe which is kept there.

Well no Law can be passed by any body which can harm Politicians in our country.

Has any Income Tax people asked any politicians from where they got so much money which they have declared and how much tax they have paid ? NO.
Only poor public is harassed by everybody.

So useless discussing this topic and wasting your valuable time , to earn your livelihood .
Posted by:prasad - 26 Apr, 2009
Dear prasad, democracy demands that such discussions are held amongst the enlightened citizens. It is a very important ritual to keep our democracy alive. Who shall bring money or wether at all this money can be brought is not the issue, this investigation is actually aimed at exposing the people with this money. When people will know their names, the effect of social bycot and such measures will definately do the work. After all these people have to live here.
ashok kothare Replied to: prasad - 28 Apr, 2009
Mr. Prasad, i can understatnd your agony but it is only us (the Aam Aadmi as called by Congress) who have to put pressure on Govt and Govt bodies to publish all such data like
1. Where poloticians got so much money that they have declared and how much tax they have paid.
2. How much black money of Indian people is lying in Foreign Banks etc.

SO lets support BJP in the initiative that they have taken for the time being.
Amit Replied to: prasad - 27 Apr, 2009
Only BJP raises the issues like probe into local hand in 26/11 terror attack, money in forigen banks and many more none other party raises issues because of there vote bank politics SO WE SHOULD SUPPORT BJP
ganesh Replied to: Amit - 27 Apr, 2009
Mr Prasad I rate your comment as the top one. You have exactly commented what i had in mind.
V Shan Virgin Replied to: prasad - 27 Apr, 2009
36: The politician & industrialists (include traders,investment consultants)nexus, will never let allow this to happen. First of all who are going to implement the law? Judiciary in India has become powerless when faced with people in power & with connections. Everybody is involved. Where the money for the election candidates come from, to carry on their campaign? Everybody knows, but no one questions. Indian politicians follow the dictum -\"Do not throw stones when living in a glass house\"
Posted by:Tushar Ray - 26 Apr, 2009
37: who is responsible for this...... no one except politicians. not even a single political party or politician willing to stop this. BJP lead govt. prepared the the lunch and SONIA lead gov. khana kha rahi hai, next time scene will be exactly opposite. I think this lok sabha election will be more ZAMELA and will make India under more critical situation.
Posted by:c. k. jani - 26 Apr, 2009
38: hope this works out & those bastards\'ll get caught
Posted by:Rakesh - 26 Apr, 2009
hi rakesh

mind ur language...
pl be cool.... cool. cooll
god bless u
ykgarg Replied to: Rakesh - 29 Apr, 2009
it'd be better if u cud pls restrict ur feelings and avoid using foul language
AMI Replied to: Rakesh - 27 Apr, 2009
41: i think its time to vote for bjp and kick out congress
Posted by:kapil - 26 Apr, 2009
I agree with you kapil , at our part we have to do campaning for BJP ,so that it get benifit
ganesh Replied to: kapil - 27 Apr, 2009
43: wow.. we were worried about some amounts which was illegally stashed outside at some period.. but see its not a syndrome that happened at some point of time rather its a regular annual affair..
Posted by:rupa - 26 Apr, 2009
Really Rupa i agree with u...
but what is the solution now..
can v do like America...
ykgarg Replied to: rupa - 01 May, 2009