The money deposited by Indians in tax havens has declined over the period from 2013 to 2017. An interim report of government which is based on the data from Bank of International Settlements (BIS), an international financial institution owned by central banks which fosters international monetary and financial cooperation and serves as a bank for central banks, concluded that deposits and non-bank loans of Indians in Luxemburg, Jersey, and the Isle of Man lowered significantly. “This government is committed to bringing home the black money stashed abroad. We have taken a series of initiatives, including demonetization, which checked the generation of new black money,” a senior government official said.
In popular perception, Indian black money is limited to Swiss banks. But the fact is, Switzerland is no longer favorite destination for tax evaders due to rising scrutiny in the country. Other tax havens like Luxemburg, Bermuda, Caribbean islands are now favorite destinations for tax evaders. The Indian money deposited in Luxemburg was reduced to $11 million in 2017 from $29 million in 2013. In Jersey the decline was less steep, it came down to $215 million in 2017 from $261 million in 2013, almost 17.6 percent decline. “Similar trends are visible across such countries and we are hopeful that due to efforts made by this government we will be able to find those who are misusing the system and book them accordingly,” the official said. The deposits in the Isle of Man declined from $119 million in 2013 to $72 million in 2017.
The deposits in the United Kingdom and France also declined significantly. The reason behind this could be growth pick up of Indian economy which will result in a better return on investment. So, it is possible that the legal money deposited in countries is being pulled out by the people to invest in India or other countries. This was the reason behind the deposits in France declined more sharply than the United Kingdom, the performance of the French economy has been sluggish in recent years, so depositors pulled money out of the country. In United Kingdom deposits are down 32.2% to $1.85 billion from $2.73 billion while in France decline is a steeper 66.3% to $141 million from $419 million in the period from 2013 to 2017.
The Modi government, since coming to power, has been able to curb black money transactions. Over the last three years, the Indian government took several measures to crack down on black money. After the Enactment of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 under which it provided a one-time compliance window to taxpayers to make declarations of their undisclosed foreign assets, the government provided a compliance window for a declaration of undisclosed income through the Income Declaration Scheme (IDS) in 2016. This was followed by Pradhan Mantri Garib Kalyan Yojana (PMGKY) in post-demonetization phase. These various legislations have helped the country to bring down the total amount of deposits in Swiss banks. Assets worth Rs 4,100 crore were declared by over 640 persons under the black money Act, and under IDS, disclosures worth Rs 67,300 crore were made by over 71,000 persons. Under PMGKY, disclosures of about Rs 4,900 crore were made by about 21,000 persons.
