Friday, December 16, 2011

Discussion in Lok Sabha on black money on December 14

BJP leader L.K.Advani moving the motion said, "mujhe smaran nahin aata, kabhi sansad mein kala dhan par charcha hua." He said that in the earlier period tax evasion was due to the high rate of taxes, as high as 97 1/2 per cent. He said credit was due to P.V.Narasimha Rao fo ending the licence-permit-quota raj. "Credit Narasimah Rao ko dena hai," Advani said.

Then he quoted Nobel laureate Gunnar Myrdal who described India as a 'soft state' because law-makers, law-keepres and law-breakers were all together.

He said conditions have changed because of the events 9/11 and in 2003 UN Convention Against Corruption was passed. Advani quoted then UN Secretray geeneral Kofi Annan as saying corruption hurts the poor disproportionately and as an insidious plague which undermines democracy. Then he referred to the Swiss law on "Restitution of Illegal Assets" in 2011.

Advani referred to the Global FInancial Integrity (GFI), an NGO, a think-tank and also to the work done by the BJP task force. He said that according to them Rs 25 lakh crores were in Swiss banks and if brought back this could be invested in the six lankh Indian villages. "Rural India will be developed," he said. He wanted a white paper on black money. He said if government did not reveal the details, then Julian Assange -- he of Wikileaks fame -- would reveal it in 2012 and "this is a humilation for us."

Then he remembered that in 1974 he went to Australia in a parliamentary delegation and Raghuaramaiah of the Congress was the delegation leader. On their they they stopped at the Philippines when Ferdinand Marcos was the dictztor. Then later on Corazon Aquino brought back the money of Marcos stashed away in foreign banks.

Advani admitted that he was ridiculed for raising the issue. "I don't worry about this kind of ridicule," he said.

Manish Tiwari of Congress who spoke next said there were 42 crore tax players, and if we removed the elederly and others, there would be 30 crore tax players. But he said the actual number of tax payers was 3crore 35 lakh and this showed the existence of parallel internal econ0my. He said that a Bank of International Settlement showed that one-third of foreign direct investment (FDI) was through tax havens, and that a European Union study has shown that there were 206 countries which were tax havens.

Finance minister Pranab Mukherjee who replied to the adjournment motion said, "I have to oppose the adjournment motion...I am not going to debate to score brownie points. I would like this House to debate, discuss and decide."

Referring to the figures of black money, he said the report of the bankers asscoiation put it as $1500 billion and $1900 billion. The BJP figure of 2009 put it at $500 million. He said that from 1948 to 2008 the figure was $213 billion which would at present prices be $462 billion. He said these estimates have been arrived because certain parameters were adopted. "I wanted to have authentic and authoritative figures," he said and disclosed that he had asked three inctitutions, including National Institute of Public Finance and Policy and National Institute of Finance to study the issue.

Mukherjee said that there are 82 Doutble Taxation Avoidance Agreements. He clarified that the UN Convention Against Corruption was related t0 drugs and terror. "There are international practices which I have to follow," Mukherjee said. He also said that "tax havens are located in the industrialised countries". He said that whatever information we got we will act. He also said that with regard to some information that "This information we did not get from legal sources." He said that "You are getting the information from DTAA for tax purposes." India is the largest investor in the euro zone and the second largest in UK, he said.

He said that Prevention of Money Laundering Act is being prepared.

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