BJP’s Swiss banks report a hoax, says CPI-M

April 18th, 2009 - 9:28 pm ICT by IANS  

Bharatiya Janata Party New Delhi, April 18 (IANS) The Communist Party of India-Marxist (CPI-M) Saturday slammed the Bharatiya Janata Party’s (BJP) task force report on illegal Indian money parked abroad as a “hoax” and alleged that around $160 billion of illegal funds were accumulated during the six years of NDA rule.
“The task force report is nothing but a hoax to cover up for the misdeeds for the erstwhile BJP(-led NDA) government,” CPI-M leader Sitaram Yechury told reporters here.

The BJP task force report claimed Rs.25 lakh crore (around $500 billion) in Indian wealth was being held in tax havens abroad. The report was released by the BJP’s prime ministerial candidate L.K. Advani Friday.

Yechury cited the report, which quotes a study by Washington-based Global Financial Integrity (GFI), and said that going by its calculation, nearly $55 billion worth of illicit transfers occurred during 2002-2004 when the BJP-led National Democratic Alliance (NDA) was in power.

“The GFI study shows that during the period from 2002 to 2006, annually $27.3 billion were stashed away from India,” Yechury said.

“If this is true, then nearly $55 billion worth of illicit transfers occurred during the two-year period 2002-2004 under the BJP-led NDA government itself, in which Advani was the deputy prime minister and the home minister,” he said.

What did he do to prevent illegal transfers when he was in power, Yechury asked.

“So the amount of Indian black wealth secreted away in the last 60 years - estimated at from $500 billion [Rs.25 lakh crore] to $1,400 billion [Rs.70 lakh crore] - does not seem to be wide off the mark, if the GFI estimate for the five-year period 2002-06 is considered.

“Going by the BJP’s estimate, around $164 billion or over 30 percent of the total stock of illicit money would have been accumulated during the six years of NDA rule!” Yechury said.

The CPI-M also accused the BJP of doing nothing to review the tax avoidance treaty that led to the Mauritius route becoming the largest conduit for the evasion of capital gains tax and corporate taxes.

“Mauritius accounts for 44 percent of cumulative FDI (foreign direct investment) inflows into India from April 2000 to November 2008. In contrast, the US and the UK account for only 8 percent and 7 percent of India’s FDI inflows. It is clear that foreign companies are using the Mauritius route to evade Indian taxes. The BJP’s task force is completely silent on this aspect,” he said.

Yechury also accused the BJP of facilitating the foreign institutional investors’ (FIIs) investment through the “non-transparent participatory notes” without any restriction during NDA rule.

“Actually the Indian rules permit a Switzerland in India. How can India call for action against Switzerland when it permits a mini-Switzerland in India?” he asked.

The CPI-M said it had raised the issue of illegal funds and tax havens much before the issue appeared on the BJP’s radar screen.

However, it also attacked the Congress-led United Progressive Alliance (UPA) government for not doing much to bring illegal Indian funds back home in times of global recession.

“The global financial meltdown and economic crisis has brought the issue of tax evasion by corporates, financial entities and the super-rich into sharp focus.

“Governments across the world are taking steps to crack down on tax havens like British Virgin Islands, Cayman Islands etc. The Swiss banks are being asked to disclose information on their account holders in order to track down assets built through tax evasion,” he said.

“The Indian government, however, has so far remained impervious to this growing global concern,” Yechury said.

The CPI-M leader reiterated his party’s contention that the UPA government should demand from Swiss banks and from banks in tax havens details of accounts of Indians.

“In the case of India, it is not only a case of tax evasion but also of funds being illegally stashed abroad, or, used for money laundering,” he said.

“If the government is serious about stopping black money and raising resources to meet the growing economic crisis, it must take steps to bring back the unaccounted, or, ill-gotten wealth of Indians abroad,” he added.

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