‘Jaane Bhee Do Yaar’

Joginder Singh ji
( Former Director-CBI )

PIL or Public Interest litigations have become the flavour of the season. It is probably rightly so, as when some concerned citizens, find that the Government for whatever reasons, is dragging its feet, on any issue of public importance, this is the only way left to prod it. A Public Interest Litigation has been filed in the Supreme Court, alleging inaction on the part of the Government for bringing back the black money stashed in the foreign banks. A Political Party had made it as an election issue before 2009, that if voted to power, it would bring back the black money stashed abroad. According to one report attributed to Swiss Banking Association report, of 2006 details bank deposit by the
TOP FIVE countries are as

INDIA $1,456 BILLION
RUSSIA $470 BILLION
U.K. $390 BILLION
UKRAINE $100 BILLION
CHINA $96 BILLION
If this report is to be believed India with $1,456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. Incidentally the figure might have changed, as the figure quoted above are four years old. However, Dev Kar, lead author of ‘Illicit Financial Flows from Developing Countries 2002-2006’ says
“The range of illicit outflows from India is actually between $22.7 billion and $27.3 billion per year.” The report by Global Financial Integrity – a Washington-based think tank – was released in December, 2008.

It is a global report and India is only a part of it,” He also added that overall nobody knew for certain how much money from India was really being transferred abroad

His report is based on a five-year data from 2002 to 2006, while the figures quoted by a political party go back to the entire period of post-independent India, by multiplying the figure into the number of years. Even if the lower figure of 5 years is taken, it shows that the average amount stashed away from India annually during 2002-06 is $27.3 billion (about 136,466 crore). It means that during the five-year period the amount stashed away is 27.3×5=136.5 billion (about 692,328 crore).
It is not that all these amounts might have gone to Swiss banks. It might have gone to different tax and secret heavens. If we put the share of Swiss banks as a third of the global aggregate, some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks.

There are more than 70 tax havens in the world, including Switzerland Liechtenstein/Luxemburg/ Channel Islands and many others. As per the USA Internal Revenue Intelligence, 40 tax heavens aggressively market themselves. While it is in order to take up the matter of bringing money stashed abroad to India, it is equally vital to make a study as to what has led to this phenomenon and whether our own laws are coming against getting the same back. It is true that India has no control over the countries, where such money has been stashed. We have to act within our own and other country’s legal frame work. Our own system has led to the generation of the black money.

The well known methods of generating and stashing money abroad or even in India include under invoicing/over invoicing of exports and imports and getting the balance stored abroad. Kickbacks from major defense/civilian contracts are not uncommon. They have been more than once exposed by our media. This is apart from the money hoarded from the old days, from the smuggling of gold and silver. Even the entertainment industry amasses the money earned by it abroad. This is apart from hundreds of other ways of earning illegal and accumulating money.
Nobody can fault with the objectives underlying the petition made to the Supreme Court. But the basic point, as to why no steps were taken or even now taken to end the menace has neither been reviewed nor examined nor pointed out the public interest litigation. The Government has still not taken any concrete steps ( Or if taken are weak and ineffective) to prevent the money from flying to tax heavens. The standards methods of under /over invoicing of exports and imports and getting the balance stored abroad have not been either improved or lapses therein rectified. Allegations of kickbacks from major defense/civilian contracts are still rampant.
Why go far off. Instead let us have a look at a recent kick back drama in a Government run organisation, National Thermal Power Corporation
The Central Bureau of Investigation (CBI) has unearthed evidence of alleged kickbacks of $21.6 million (Rs 100 crore) and Rs 3.33 crore by a Russian company, Techno promo export (TPE), to Indian agents to secure a Rs 2,066 crore power project contract. Following the revelation, the ministries of power and external affairs have recommended termination of the contract, citing “fraudulent practice” and “delay in execution”. It happened in November, 2009. “The CBI report is very clear that TPE paid illegal gratification to unknown officials of NTPC and others through their Indian agents to win this contract, thereby violating the contract and breaking the law of the land. No heads have rolled and the standard explanation would be that let the law its course and only after the court case is over, Or action will be taken against the guilty, in due course.
· In February, 2010, the Income Tax Department discovered that an IAS officer of Chattishgarh was found to have a staggering 220 bank accounts several of them opened on fake names and addresses, and a few in the names of his domestic helps. Total deposits in these accounts were Rs. 40 crore, independent from other assets worth millions of rupees. Others items found included Cash: Rs. 52 lakh Jewellery: Rs. 72 lakh.
· From another IAS, couple in Madhya Pradesh, the Income Tax Department recovered Rupees four cores in cash.
These are the representative and latest samples of neo rich bureaucrats, who have been encashing their offices and charging the public, for doing services to it, which should come free as a matter of right. Indeed, the laws, as they stand, are sleighted in favour of the corrupt, dishonest, cheats and fraudsters. The way, the laws provide one appeal after another, and take two to three decades for disposal of cases, due to heavy pendency, the Government and the public suffers double whammy.
Though article 311 of the Constitution provides for summary dismissal, not even in one case, an IAS or IAS Or other Government employee has been dismissed. Indeed after 6 to 9 months, some of the suspended government employees get as much as 90% of their salary. Most of them manage to persuade the powers that be, that instead of just paying them the salary, the Government should reinstate them and get some work from them. Once back, even to innocuous jobs, their cycle of making money starts again which is used to hire expensive counsels, to help them escape on technical grounds.
Another layer of protection to the senior officials is the law, which requires that prior sanction of the Government of India, is required for even starting an anti corruption inquiry against the officers of the level of the Joint Secretaries and above. This almost amounts to asking a thief, for permission, that whether his activities could be investigated.
Apart from that unpractical and unenforceable laws lead to the generation of the black money. For example no property deal can be completed, without a substantial portion as a black or unaccounted as a vital component. It is not a top secret, but a well known reality. But nothing has been done in this direction.

It is not that there is a dearth of money in the country and so we cannot alleviate poverty and ameliorate the life of the poor. It is because there is siphoning off at every level and the Government simply sitting and watching and exclaiming that the law will takes its own course. It has the power and authority to rid the country of the scourges of corruption and black money plaguing it. Only, it has to have the will, to do it and not seek for alibis, to put off the evil day.

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