Efforts on to retrieve black money stashed abroad: government (Lead)

April 22nd, 2009 - 9:11 pm ICT by IANS  

Manmohan Singh New Delhi, April 22 (IANS) The government is not sitting idle over the issue of retrieving over Rs.70 trillion of Indian black money stashed in various foreign banks and will detail the actions taken in this regard within “48 hours”, the Supreme Court was told Wednesday.
Additional Solicitor General Gopal Subramaniam made this assertion before a bench of Chief Justice K.G. Balakrishnan during the hearing of a lawsuit that accused the government of being oblivious to black money stashed away by tax evading citizens in foreign banks.

The law officer offered to file an affidavit to the apex court “within 48 hours”, detailing the government actions aimed at retrieving the Indian black money in recent times.

Subramaniam asserted that the government had written to the German government, seeking details of Indian citizens possibly having secret accounts in foreign banks, within 24 hours after a leading financial daily published a report in February 2008 that a former employee of the LGP bank in Liechtenstein had sold data on about 1,400 people to tax authorities across the world.

Subramaniam said the New Delhi-based financial daily carried the report Feb 27, 2008, and the government had written to Germany, seeking details of possible Indian tax evaders Feb 28.

He said the government had received a response from Germany, which could not be disclosed in the open court.

He also questioned the timing of the lawsuit, subtly hinting it was aimed at garnering political mileage during the elections.

“The timing of filing the petition is mystifying when the election was round the corner,” said Subramaniam, while pointing out to the court that the petition refers to a communication from the finance ministry to Leader of Opposition L.K. Advani on the issue of Indian black money stashed away in foreign banks.

Detailing the steps taken to curb the circulation of black money from the Indian economy, the law officer said the government has reviewed its Double Taxation Avoidance Agreement with various countries that were supposed to be tax havens.

He also refereed to Prime Minister Manmohan Singh’s declaration at the G-20 summit that “the days of secrecy in banking law is over”.

Accepting the law officer’s offer to file a detailed affidavit to the court on the issue, the court adjourned the matter to May 4.

The lawsuit was filed Tuesday jointly by former law minister Ram Jethmalani, former Lok Sabha general secretary Subhash C. Kashyap and former Punjab Police chief K.P.S. Gill.

The lawsuit is based on a research article written by noted economist and Bangalore’s Indian Institute of Management professor E. Vaidyanathn for the institute’s in-house journal Eternal India.

Vaidyanathan has estimated that “between 2002 to 2006, $1.4 billion, roughly equivalent to Rs.70,00,000 crore (Rs.70 trillion), have been siphoned off from this country and stashed away in foreign banks”.

Pointing out that the Indian government was fully aware of the offshore flight of the country’s money, the lawsuit said that former finance minister and present Home Minister P. Chidambaram had publicly acknowledged this fact and admitted it in a communication to Advani.

The lawsuit said that despite this admission, the government took no step to retrieve the black money stashed abroad.

Allaying suspicions that the lawsuit might have been filed to further the political agenda of BJP’s prime ministerial candidate Advani, senior counsel Anil B. Divan told the court that the case had no political links.

He said the lawsuit attributed the government’s lack of interest in taking steps to retrieve the black money to “the fact that influential politicians of most political parties are involved in the offence” of stashing the country’s wealth in foreign banks.

Therefore, it cannot be suspected of targeting any one political party, Divan said.

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