False promises? BJP's response on black money is even worse than UPA's

One party that made the biggest political capital out of the much fabled black money issue in India is the BJP when in 2009, the then PM-aspirant LK Advani declared that he would bring back to the country all the offshore wealth stashed away by Indians in 100 days. Advani didn’t become the PM and the BJP easily escaped defaulting on its promise. After five years of incessantly charging the UPA with shielding black-money holders, the party repeated its promise on the issue before the elections in 2014. This time, the BJP president Rajnath Singh repeated what Advani had said. This time, however, the party won the elections and they had a deadline at hand. “Imagine what we could do with all that money! We could build roads, electricity grids, flood barriers – this money is the money of the people,” Advani had said . [caption id=“attachment_1666419” align=“alignleft” width=“380”] Reuters[/caption] But what came out of that promise on Monday was a damp squib. A terrible anticlimax of all the promises and hype that they had dished our for years - three insignificant names and perhaps even more insignificant amounts of money. What shocked the nation was BJP’s response when asked about other names, the quantum of black money, and all the promises they had made. The party said that it was legally bound not to name and shame. It can only disclose names to a court, that too after filing charge-sheets against the black money holders. The names will have to be preceded by investigations. It’s a time consuming process. “But, what about all the hype that you had created and the grand promise you had made that you would bring back the money in a certain number of days? Why don’t you at least disclose the names that the Germans and the French (of the Swiss accounts) gave you?” “Sorry, we cannot because we are legally bound not to disclose the names outside the court” “But, this is exactly what the UPA had said. And all your allegations of inaction against the UPA?” “It will take time. Unlike the UPA, we are serious about it. We are taking steps. We had set up a task force and it’s working.” On Monday, all the BJP spokespersons sounded exactly like the Congress leaders starting with the former finance minister Pranab Kumar Mukherjee when he had said that because of the double taxation treaties with the countries concerned, the government couldn’t disclose the names of people with foreign bank accounts. He held firm while the opposition went for the jugular. His successor P Chidamabaram also followed the same line. Now, the BJP is not only parroting the same line, but is even swaggering about it. If not earlier, the BJP may have realised at least now that black money allegedly stashed away by Indians abroad is a nebulous idea that can be used to deceive a lot of Indians with first world aspirations. If there is indeed lot of money siphoned out of the country, it had happened for decades and people who had done it knew how to protect it. Most of them would be people with political connections, people with criminal background and those with businesses. The tax havens, which otherwise claim to be clean countries such as Switzerland, Singapore and Mauritius, would not do a thing to touch this money. It’s also foolish to assume that the money has been static in these banks. They would have moved on in different forms and could have even come back to the country as investments. The estimates themselves are staggering which have even surprised the Swiss. The most common estimate that the BJP brandished in its “kala dhan” campaign was that up to US$ 1.4 trillion from India was stashed away in Switzerland. The Swiss Bankers Association had termed this “at best pure speculation and at worst pure fantasy”. “Where are they getting these numbers? Some of the figures being thrown around about ‘black’ money allegedly held by Indians in Swiss banks are quite incredible,” James Nason at the Swiss Bankers Association had reportedly asked . What both the BJP and the other bring back black money campaigners such as Ram Dev had effectively done was fanning the wild imagination of people - both professionals and amateurs - regarding the quantum of black money abroad. How much exactly is stashed away and is there a way to estimate it other than blind speculations? According to the government of India white paper on black money (2012), which quotes estimates by GFI (Global Financial Integrity), between 1948 and 2008, $ 232.2 billion had been shifted out of India, which would have become $ 462 billion with standard rate of returns. The while paper, significantly makes the comment that it needs to be ascertained if the money is indeed stashed abroad or had been partly round-tripped. By government of India’s own admission, a lot of this money could have come back. According to Department of Industrial Policy and Promotion (DIPP) data, from 2001 to 2011, 41.8 percent of the entire FDI in India was from Mauritius. The next big inflow was from Singapore (9.17 percent). The white paper notes: “Mauritius and Singapore with their small economies cannot be the sources of such huge investments and it is apparent that the investments are routed through these jurisdictions for avoidance of taxes and/or for concealing the identities from the revenue authorities of the ultimate investors, many of whom could actually be Indian residents, who have invested in their own companies, though a process known as round tripping.” Investment in Indian stock market by participatory notes s is another way of bringing back the money. So, the trillion, or a quarter of it, that poor Indians are salivating about is an abstraction, a fantasy. Even if there is real money, that too in the billions, how would India ever lay its hands on them? Did BJP have a plan when they sold those fantasies? All that the party had promised in its manifesto was a task force. Let’s get real. At least do something to stem the phenomenon from now. Curb political and corporate corruption. And please tell Indians that holding a bank account in a foreign country isn’t illegal and it doesn’t mean that it is to stash away black money. That’s why hundreds of names that foreign banks may hand over may finally boil down to an embarrassing three or a handful.