The Special Investigation Team (SIT) on black money last week asked the Department of Revenue Intelligence (DRI) to verify a report which claimed that illicit financial flows out of India during 2004–13 were to the tune of $505 billion, the finance ministry said in a statement on Monday. This data is for the period during which Congress-led United Progressive Alliance government was in power.
“The Global Financial Integrity, in its report, ‘Illicit Financial Flows from Developing Countries 2004–13’ has estimated that illicit financial flows out of India for the period 2004–2013 to be the tune of $505 billion,” the ministry said.
The Supreme Court-appointed SIT obtained detailed calculations of country–wise illicit financial flows for each of these years from Global Financial Integrity, the ministry said. The details have been sent to DRI on February 8 to verify the extent to which the calculations are correct, the finance ministry said.
The SIT also observed that since such reports are widely used in academic circles, it is crucial to ascertain their veracity. “Further necessary action shall be taken by SIT after receipt of report from DRI,” the finance ministry said.
The instruction to DRI comes on the heels of the US-based think-tank Global Finance Integrity stating in a report that India had fourth largest outflow of black money in the world with a whopping $51 billion being siphoned out every year between 2004 and 2013.
“Various reports including those by Global Financial Integrity have emphasised that Trade Based Money Laundering is the main medium or process through which funds are illegally taken out of countries,” the finance ministry said.
The SIT too in its earlier reports had observed that trade-based money laundering is a major source through which illicit money is taken out of the country.
The SIT had earlier suggested that there should be institutional mechanism through a dedicated set up which examines mismatch between export and import data with corresponding import and export data of other countries on a regular basis.
The SIT also recommended that a system for cross checking of prices of imports and exports with international prices may be developed especially in case of commodities.
The SIT was constituted in May 2014, with two former judges of the Supreme Court as chairman and vice-chairman to deal with issues relating to black money stashed abroad.
The National Democratic Alliance government last year enacted the Black Money (Undisclosed Foreign Income and Assets (Imposition of Tax) Act, 2015 to tackle the issue.
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