From BOB Goswami
INDIA NEWS - Asia’s one of the most fast developing nations India has coughed up more than $460bn since Independence on illegal capital flow, funneling corrupt riches money to overseas banks widened the gap between rich and poor. According to a new report, illegal money through various sleaze exercises like tax evasion, crime and others have founded strong base of inequalities irrespective of rapid growth of its economy.
US-based group Global Financial Integrity has published its reports, showing the illegitimate outflows of wealth to overseas robustly increased after economic reforms began in 1991. The group based in Washington has also revealed the detail analysis of cross-border flow of illegal money around the world.
The shadowy projection of mounting economy actually masquerades the poor state of governance in India since Independence in 1947. The ironical economical growth of nation in reality disguises the start term of financial cost of tax evasion, corruption, and other illicit financial practices in India.
Findings of Global Financial Integrity:
- India’s $462bn wealth has gone astray in illicit outflows of money between 1948, a year after Independence, and 2008.
- The capital outflow is more than twice of India’s external debt of $230bn.
- The total illegal capital flight out to overseas is equal to 16.6% of its GDP.
- After the economic reforms in 1991, 68% of India's capital loss occurred.
- The main guilty are private organizations and high net-worth individuals.
Indian companies moved money from developed country banks to "offshore financial centers" (OFCs) increased from 36.4% in 1995 to 54.2% in 2009.
Dev Kar, a former International Monetary Fund economist said that the illegal money that consists of India’s underground economy drains out in foreign lands. According to him, India’s underground economy has been believed to sum up 50% of the country’s GDP - $640bn at the end of 2008.
The report is based on a World Bank model to estimate India’s missing wealth. Mr. Kar warned that the figure could be more alarming as it didn’t include other illegal transit such as smuggling and cash transfer outside the financial system.
India has always been a victim of political and bureaucratic corruption since independence. A report published in 2005 revealed that more than 15% of the people in India had first hand experience of bribery or peddling influence to set their jobs in public offices. India was ranked 87th of 178 countries in Transparency International's Corruption Perceptions Index and in 2010 India had earned the name of most corrupt governments in the world.
In addition to politics and bureaucracy, Indian corruption has deep rooted in almost other sectors. The Indian Armed Forces where the most money is invested in every budget have frequently under the scanner of corruption. Many senior officers have been caught for selling defense stores in the black market. The shocking criminal cases against armed forces have tarnished the most respectable institution in the world.
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