Rs 15 lakh figure for 1.2 billion Indians is untenable since most of the black money Indians had deposited in Swiss bankswas cleared out during the last decade. According to reports. The amount held by Indians through fiduciaries in Swiss banks has reached a record low. Switzerland never saw such massive deposits from any country.More than half the undeclared money from India has been moved to Dubai and Singapore where it could have been invested in real estate, gold or re-entered India.
According to data released last year, Swiss National Bank has estimated the funds currently held by Indians in Swiss banks at a mere $1.98 billion.Fear of disclosure due to greater scrutiny of this illicit wealth has played the main role in the flight of capital.While Indian deposits may have shown a steady decline, the money held in Swiss banks by foreign depositors rose during 2014 to $1.6 trillion at the end of 2013.From 2009, the Indian government has been highlighting this issue of black money without realizing that the easiest thing to do is to close a bank account and transfer the money out.
Many of the deposits are known to have belonged to politicians which is why no government is forthcoming with the names of the depositors.The total Indian deposits held in Swiss banks at the end of 2014 included 1,776 million Swiss francs or Rs 12,350 crore held directly by Indian individuals and entities and another 38 million Swiss franc through ‘fiduciaries’ or wealth managers.The publication of names of Indian account holders in the Swiss Federal Gazette is an internal Swiss legal procedure. Names are only published in the Federal Gazette as a last resort when there is no contact address in Switzerland for foreign residents who are affected by an administrative assistance request.
The Indian government recently opened a Compliance windowfor taxpayers to regularize their situation. The government scheme whereby tax evaders can pay a penalty of 20 percent and get their black money regularized.Banking circles are aware that undeclared assets by Indians have been moved out. Rich Indian families are already under great scrutiny by their government and therefore known to be very careful with their finances.
Discussions have been held between the Swiss and Indian governments to detect, recover and repatriate illegal deposits.The key issue is what pressure the Indian government can exert on the Swiss government. The US threatened to close all Swiss banks operating in the US which led to the Swiss immediately signing a treaty with the US and UK. On the subject of the Automatic Exchange of Information between the Swiss and Indian governments expected to be operationalized by 2018.India has set up a Special Investigation Team headed by Justice B M Shah to look into the issue of black money. Justice Shah has welcomed the Swiss Federal Council’s approval of the bill to amend its laws to allow its government to share information with countries. Detection and recovery of black money in foreign tax havens is a key concern of the Modi government.