Prime Minister Manmohan Singh raised the issue of black money during a cabinet meeting here Thursday, a day after the Supreme Court queried why the government cannot name those involved in this $1.5-trillion “national plunder”.
The discussion came against the backdrop of the apex court coming down heavily on the government’s reluctance to provide full information on ill-gotten money stashed away by Indians in foreign banks.
Finance Minister Pranab Mukherjee, officials said, will hold a detailed briefing on the discussion soon.
The prime minister made it clear Wednesday that information on black money stashed in tax havens abroad cannot be made public as it would entail violation of India’s treaty obligations with other countries and jurisdictions.
“The information will not be made public. It will be a violation of treaties,” Manmohan Singh told reporters after initiating a cabinet reshuffle when asked about his stand on black money abroad.
“There is no instant solution to bring back what is called black money. We have got some information and that has been provided to us for use in the collection of taxes.”
The matter had come up before the apex court after noted lawyer Ram Jethamalani sought directions to the union government to act upon a report that Germany was willing to share details of Indians having accounts in banks based in Liechtenstein.
Jethamalani wanted the directions to be given to the government to bring back such ill-gotten money, estimated at a whopping $1.5 trillion – nearly one-and-a-half times India’s gross domestic product – put away in foreign banks by Indians.
“It is not a case of tax. The issue involved is of serious nature. Keep aside all the things. Let us consider the persons named,” said the apex court bench of Justice B. Sudarshan Reddy and Justice S.S.Nijjar.
The finance ministry in its status report during last hearing of the case said there were 12 trusts owned by 26 tax assesses, which even include non-residrnt Indians, that hold accounts in the Swiss and German banks in Liechtenstein.
There are 15 banks in Liechtenstein, of which seven are Swiss-owned. The principality, with an area of about 160 sq km, is surrounded by Switzerland and Austria and has a total population of 67,000 people.
Mukherjee had maintained in the past that India has followed the guidelines laid down by the Organisation of Economic Cooperation and Development (OECD) and signed independent treaties with a host of countries and territories.
He has also said these treaties were meant to share information on illegal transfers, often referred to as black money, but cannot be disclosed even to parliament, let alone the Directorate of Enforcement because of the secrecy code.
Bharatiya Janata Party (BJP) president Nitin Gadkari has said the union government’s reluctance to disclose the names of Indians with ill-gotten money parked abroad raised suspicions about it and the government should make the names public.