Govt bid to put figure to black money
On Saturday, the government had appointed a high level committee of tax officials to suggest measures to tighten laws to curb the generation of black money.
The two moves have been announced days before an anti-corruption protest is to be launched by yoga guru Baba Ramdev.
The UPA government has faced strong criticism from courts, Opposition parties and civil society groups for its handling of the issue of black money and corruption in public life. The government has taken some measures to stem the criticism and has engaged with authorities in tax havens to get information about money stashed in these countries.
The three institutes selected to undertake the study are National Institute of Public Finance and Policy, National Institute of Financial Management and National Council of Applied Economic Research. The finance ministry statement said the three institutes had launched their study in March and are expected to complete the project within 18 months. The study is expected to bring out the nature of activities that encourage money laundering and its ramifications on national policy.
The study will also focus on the kind of activities which promote money laundering and identify important sectors of the economy in which unaccounted money is generated and causes and conditions that result in the generation of unaccounted money. It will also examine methods employed for generating black money and conversion of such funds for legitimate activities.
The three institutions have also been asked to suggest ways and means for detecting and preventing unaccounted money and bring it into the mainstream economy. They have also been given the mandate to suggest methods to be used for taxing black money stashed in foreign countries. The study will also estimate the quantum of non-payment of tax due to evasion by registered corporate bodies.
The government has so far maintained that there are no reliable estimates of black money generated and held within and outside the country . It says the different estimates of the quantum of black money range between $500 to $1,400 billion. A study by the Global Financial Integrity Group has estimated the illicit outflow at about $462 billion . The finance ministry says these estimates are based on largely unverifiable assumptions and therefore the government has undertaken the study to find out the actual size of the black economy.