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Rediff.com  » Business » More panels on black money? No, say experts

More panels on black money? No, say experts

Last updated on: June 7, 2011 15:08 IST

More panels on black money? No, say experts

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Delays in action against black money by way of committees and studies will give time to corrupt politicians, businessmen and bureaucrats to divert their ill-gotten funds into shell companies, an eminent Jawharlal Nehru University professor has said.

"More studies or committees or new special investigating wing and treaties with foreign governments are only to stall action," said Arun Kumar, head of the Centre for Economic Studies and Planning in Jawaharlal Nehru University.

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Kumar, who has authored The Black Economy in India, said the government's move to institute studies and form committees on black money 'will only give time to triad -- politicians, businessmen and bureaucrats -- to invest their funds in shell companies abroad.'

He gave the example of a politician from Jharkhand who is alleged to have invested unaccounted funds in African mines.

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Similar views were expressed by National Institute of Public Finance and Policy  professor Ila Patnaik, who said that agencies like the Directorate of Criminal Investigation were not needed to check tax-related offences.

"I don't think we require any new special investigation agency like the Directorate of Criminal Investigation to deal with tax-related crimes. . .," she said.

Under pressure from various quarters, the government had recently set up the DCI to deal with tax-related crimes and initiate prosecution proceedings against tax defaulters.

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According to Kumar, the government can act on the leads provided by investigating agencies that tape telephone conversations of suspected persons.

"Investigating agencies provide the leadership with information through tapping lakhs of phones every year," he said, adding that the government can use the information to book culprits.

The share of the black economy has increased from the Wanchoo Committee's estimate of 7 per cent in the early 1970s to 21 per cent according to the Shankar Archarya Committee to almost 50 per cent according to the latest Global Integrity Report, said Kumar, who conducted an independent study in 1999 detailing the various aspects of the 'black economy'.

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"In the last 60 years, dozens of committee have studied various aspect of black money and given thousands of suggestions.

"Hundreds of these suggestions have been implemented, but the size of the black economy has grown substantially," he said.

Besides setting up the DCI, the government has also commissioned a study to estimate the extent of black money within and outside the country.

The study will be jointly conducted by the NIPFP, National Institute of Financial Management and National Council for Applied Economic Research.



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