The Matrix of Indians Laundering Black Money

Let black money remain in Swiss banks: Kejriwal
Sunday, February 27, 2011, 12:04
New Delhi: Eminent social activist and Magsaysay award winner Arvind Kejriwal on Saturday said the black money stashed in Swiss bank by Indians should be left there as it will never be properly used if it comes back to the country.
"Let the Indian money in Swiss bank remain there, at least it is safe. If it comes to India, it won’t be used for development but will go in corrupt hands," Kejriwal said at a press conference here.
"If it comes to India under present laws, in absence of any strong anti-corruption law, it will be lost to corruption," he said.
The activist was in the national capital, along with Anna Hazare, Kiran Bedi and Swami Agnivesh to press for the formulation of a strong Lokpal Bill, or anti-graft legislation.
"It was money meant for development, but if it comes back it won't be used for development. As soon as the government started inquiry on Hasan (Ali Khan), he shifted a major amount of money. Now the government is looking for it," he said.
The activist stressed that under the present laws, the investigating agencies were working under those accused of corruption.
To start an investigation, the Central Bureau of Investigation needs permission from those against whom it is supposed to act, he said.
Let black money remain in Swiss banks: Kejriwal

Black money drives real estate and housing
Our black money is here, not in Switzerland: Swaminathan SA Aiyar
The government is signing agreements with many countries to access more information on foreign bank accounts. The very signing will warn crooks to transfer their funds to chains of corporations in lightly taxed places ranging from Liechtenstein to Cayman Islands and Mauritius to Bermuda. Once laundered through a dozen corporations in a dozen tax havens, money becomes white.
Some businessmen may park large sums temporarily in Swiss banks pending better deployment. Some politicians may not yet be financial savvy and may be content keeping large sums in Swiss banks. These will be exceptional cases. The bulk of black money abroad is in financial assets across the globe.
Where exactly? Nobody knows. But one of the best places in which to invest money is India, not Switzerland or the US or any western destination. Housing prices in the US doubled after 2000 and that was called a bubble, but housing prices in India rose almost ten-fold. Declarations by politicians of their assets show a huge preference for real estate over all other assets.
The Dow Jones index in New York is barely higher today than in 2000, but the Bombay sensex is up six-fold. Interest rates on Indian government bonds are 8% against 3% in the US and Germany. Clearly India is one of the best investment destinations in the world. Income tax rates today are modest and there is no tax on dividends and capital gains.
So, enormous sums of black money that once went abroad have returned in white form over the last two decades. These flows may have helped the Indian economy grow faster. They have certainly helped push up land and stock prices to dizzy heights, and election spending too.
India now gets $60 billion annually of remittances from NRIs, and up to $50 billion from portfolio inflows. A significant part of this must be black money returning as white. Some inflows come as NRI bank deposits in India.
Our black money is here, not in Switzerland: Swaminathan SA Aiyar- click here to read more