The parliament was recently informed that three institutes selected by the government will conduct a study on black money that has been stashed away by Indians in foreign banks.

These three agencies, the parliament was told, would submit a report in the next 18 months.

But what is the meaning of such a study and would it help India ultimately?

Experts feel that this exercise would not be of much help as many facts are already known.

Reports go on to suggest that Indians have stashed away anything between $500 billion to $1.5 trillion outside the country.

Most of this money has been stashed away in Switzerland, reports also suggest.

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India's biggest worry is that this money is being extensively used for terror related activities.

The Peruvian Financial Intelligence had recently warned that the Al-Qaeda was routing money through India and intelligence agencies believe that there could be a great deal of black money owned by Indians involved in this.

The money could be used for the purchase of arms and ammunition, real estate and also betting.

The Supreme Court of India on Tuesday while dealing with the Hassan Ali case made an important point when it said that terror charges should be slapped in this case.

Security agencies say that there is a major drive across the country to bring back money stashed away illegally in other countries.

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While appointment of three agencies is indeed a step in the right direction, there also is a danger that most people may try and withdraw the money and keep it in circulation elsewhere.

The safest bet, naturally, would be to park with hawala operators who are notorious for reporting to terror outfits.

While the money that is stashed away in financial institutions can be brought back through diplomatic channels, it is the other part which is out in the open that will pose a challenge for India to recover.

Thus, there is a need to coordinate with the security and intelligence agencies of these countries, the IB in India said.

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The government has proposed a 5-point strategy to deal with the issue of black money:

• Joining the global crusade against black money,
• Creating an appropriate legislative framework,
• Setting up institutions for dealing with illicit funds,
• Developing systems for implementation, and
• Imparting skills to the manpower for effective action.

In addition to this three institutions would also conduct a study and submit its report on this issue.

R Vaidyanathan, professor of finance at the Indian Institute of Management, Bengaluru (retd) points out that there is no detail that is not available with the government on black money.

Bringing out new rules and regulations is not the point here.

We have the best in the world to deal with this menace. For India, crossing the last mile is the biggest problem.

India needs to implement the existing laws and proceed.

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Take Hassan Ali, Commonwealth games or the Indian Premier League cases.

There is enough evidence and action must be initiated in these cases in the severest possible manner in the shortest possible time.

This would set a precedent and act as a deterrent in future.

This is not the time to worry about the double taxation treaties. The need of the hour is to close down all tax havens.

India needs to coordinate with countries such as France and Germany which are serious about tackling this problem.

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M K Narayanan, India's former national security advisor had also mentioned that India is affected since money from the tax havens are being used for terror related activities.

India needs to work to change the global financial architecture by abolishing all these tax havens.

Moreover one must also remember that all double taxation treaties will be prospective in nature and not in the retrospective.

India will sign a treaty with Switzerland in December 2011.

However, this treaty will be signed in retrospect.

So what happens to the money stashed prior to December 2011?