Money flowing from India to foreign banks?
By Dr Jay Dubashi
Money is like mercury; it seldom remains in one place, and changes hands with the speed of light. Even Einstein, who knew a great deal about light and virtually nothing about money, would have been at a loss to tell us with what speed money travels from one place to another, from country to country, and from one bank account to another. And since money changes colour as it travels, we do not know how much money is white and how much is black, for what is black today could be white tomorrow and vice-versa.
The CBI chief, AP Singh, has now told us that half a trillion US dollars worth of black money – we assume it is black – has been stashed in tax havens by Indians in foreign accounts, and it will be a miracle if we succeed in bringing it home. Half a trillion dollars is a lot of money, almost worth Rs 24 lakh crore, not very different from what we have in foreign reserves. There are so many zeroes that most of us get lost working out the exact amount. But it works out at 400 dollars per person, or Rs 20,000 per head. For a family of five, the loot stashed away in foreign bank accounts amounts to Rs one lakh, not something to be sneezed at. If, by some magic, the hoard was to be brought back to India and distributed equally, each family would get a lakh of rupees or about two thousand US dollars, enough to go on a holiday in Europe, all expenses paid.
The CBI chief says that the cash will never come home, because there is no political will – in other words, the politicians would not allow it. Of course, they won’t allow it; most of it is their money. Our politicians are the richest in the world, which is why, even Indian children now want to be politicians, not engineers or doctors, or even IAS officers. Politics is where money is, whether it is at home or in Switzerland or Virgin Islands or even London. One expert has calculated that roughly half the cash abroad belongs to politicians and the other half to businessmen, but nobody knows which half!
Why do politicians and businessmen keep cash abroad? Firstly, it is easy. You are not asked any questions when you open an account. You can give any bogus name; they do not ask for your passport. But there are people with multiple passports, and in any case, in some of the tax havens, you can get a new passport everytime you open an account. Indian businessmen carry lots of passports or maintain lots of passports in the tax havens, and so do, I suspect, Indian politicians. In fact, since some leading politicians are also businessmen, if is difficult to say who is who, and there are banks abroad, where such questions are never asked.
Whenever the question of black money comes up, our Finance Minister gets up in the Parliament and says, with a serious face, that they are trying their best, but, because of the secrecy clause and other equally bogus reasons, it is not easy to do so. This is nonsense, of course, and everybody knows it is nonsense. If the Americans can get the names of their crooks, why can’t we? Because, our politicians are crooks too, and they not only know who has money abroad, they too have their own accounts abroad.
Take a simple case. Even a school boy knows that Rajiv Gandhi took bribes – or commissions, as they are called – in the Bofors affair. The government knows the exact amount of the bribe, because it is all in the documents. So why can’t the authorities bring it home? Not because the banks will not give the money, but the people concerned do not want it back. It is, after all, safe where it is, and you never know when you might need it. So you ask the officials to shrug their shoulders and announce that getting money back is not a simple matter and there is little we can do about it.
Take the question of Pakistan, a country that exists only on the map and will one day just disappear, as Soviet Russia did in 1991. The Supreme Court of Pakistan –yes, there is a Supreme Court in Pakistan, for your information – has asked its Prime Minister to ask Swiss authorities to reopen old corruption cases against President Asif Ali Zardari, which Yousaf Raza Gilani, the Prime Minister, refuses to do. Zardari and his wife, Benazir Bhutto, have foreign accounts everywhere, as has every Pakistani politician, army officer, and businessman. Benazir, who talked grandly about the importance of cleanliness in politics, has or used to have a huge country house, with acres of grounds, in Surrey, not far from London.
I have myself seen it and used to have a photograph of the estate which Benazir is supposed to have purchased for five million pounds. She is not the only Pakistani politician with real estate in England. Gen Musharraf spends most of his time in London and Dubai. How does he do it? They all have millions of dollars and pounds stacked away in London and New York and God knows where, and so have Indian politicians, and, of course, Indian businessmen. I have a feeling Indian cricketers also have accounts abroad, and so have politicians and businessmen with links to Board of Cricket Control of India (BCCI).
For the last thirty-odd years, ever since this matter of foreign accounts came to light, the government has done nothing but ask economists in the Planning Commission to work out so-called estimates of black money. This is a useless activity, but exactly the kind of activity lazy economists love, like working out bogus figures about poverty. Just as governments should spend more time on removing poverty rather than working out bogus estimates, it should try and get black money back, rather than calculate its size. But this is what lazy bureaucrats always do, for it keeps everybody happy, including politicians. As the size of the black money grows, so does the government’s incapacity to deal with it. One day, the politicians will turn round and say, sorry, we cannot do anything about it. it is literally a huge problem!
There was a time when Indian businessmen only had foreign accounts, some genuine, some under cover. Now, they not only have foreign accounts, they have legitimate offices and companies abroad and many now have houses – mansions – abroad, where their families live. Go to Grosvenor Square in Mayfair, which is supposed to be the poshest part of London, and you will find most of it occupied by Indian families. You cannot purchase a house there for less than Rs 100 crore. Where does the cash come from? I suspect that the houses may actually belong to Indian politicians, not businessmen. It is easy, after all, to transfer money from Italy to London, no questions asked. I have a hunch that even if we get the names of people with accounts in tax havens, the real owners will be entirely different, possibly with addresses in Italy, and maybe in Delhi, not far from India Gate. Those who hide their loot also are adept at hiding their names!
