Swish stash falls by 80% since Modi took charge

Govt rejects Cong charge that black money rose by 50% since 2014

The issue of black money that dominated the political discourse during 2014 Lok Sabha polls seems to have gained traction in the build-up to the next general elections.

The BJP-led NDA Government on Tuesday asserted in Parliament and outside that illegal money in the Swiss banks came down by 80 per cent since Prime Minister Narendra Modi took charge, rebutting Congress’ charge that it rose by 50 per cent despite the tall claims of the ruling regime.

Union Finance Minister Piyush Goyal cited figures in the Rajya Sabha to affirm that black money in Swiss banks reduced by 80 per cent since Prime Minister Narendra Modi took over in 2014.

Later, talking to mediapersons on Parliament premises, he attacked Congress president Rahul Gandhi for maligning the country’s image by making false claims on the basis of baseless reports.

Goyal, who had taken on Rahul on the issue of lynching in Alwar by terming him a ‘merchant of hate’, said the Congress president says baseless things without knowing the issue. Rahul had last month cited media reports to attack the Government that contrary to their positioning on black money, the amount has, in fact, increased by 50 per cent.

Indian deposits in Swiss banks fell by 34.5 per cent in 2017 and by 80 per cent since 2014, Finance Minister Piyush Goyal said, citing data from the global body of central banks, the Bank for International Settlements (BIS).

He said this countering reports last month quoting the Swiss National Bank (SNB), the country’s central bank, as saying in its annual report that Indian deposits had risen by 50 per cent in 2017.

Goyal informed the Rajya Sabha during Question Hour that he discussed the issue with the Swiss authorities, who told him in a written reply that media reports “have not taken account of the way the (SNB) figures have to be interpreted.”

Last month, PTI had reported SNB data that the money parked by Indians in Swiss banks rose to CHF 1.01 billion (Rs 7,000 crore) in 2017 after falling for three consecutive years.

“The Swiss Authorities say that the figures published by the Swiss National Bank are regularly mentioned by the Indian media as a reliable indicator of the amount of assets held with Swiss financial institutions in respect of Indian citizens. They clarify how this is wrong. They say more often than not, the media reports have not taken into account the way the figures have to be interpreted which has resulted in misleading headlines and analysis. This is (the Swiss) Government response,” he said.

Goyal said according to Swiss authorities, the more reliable data source for deposits held in Switzerland is the Locational Banking Statistics (LBS) of Bank of International Settlements.

LBS measures international banking activity from a residence perspective, focusing on the location of banking office and captures around 95 per cent of all cross-border banking activity.

He said SNB data includes non-deposit liabilities, business of Swiss branches located in India, inter-bank transactions and fiduciary liability.

BIS data show non-bank loans and deposits — which constitute the individual and corporate deposits and exclude inter-bank transactions — have fallen by 34.5 per cent in 2017 to $524 million compared to $800 million in 2016, he said and vowed to continue the crackdown against black money.

“Further, there has been significant reduction in Swiss non-bank loans and deposits of Indians by 80.2 per cent between 2013 and 2017,” he said, adding the figure in 2013 was $2.6 billion which came down to $2.3 billion in 2014 and $1.4 billion 2015.

“Moreover, it is frequently assumed that any assets held by Indians are undeclared,” he said. “So if you want to know the deposits of Indian residents in Switzerland, the correct data source is called locational banking statistics.”

The Minister said the Automatic Exchange of Information based on Common Reporting Standard has commenced from 2017 with many countries enabling India to receive financial account information of Indian residents.

“This will also be useful in bringing the unaccounted income and assets to tax,” he said.

However, Goyal’s reply did not satisfy Trinamool Congress members, who stormed into the Well of the House demanding that black money stashed in Swiss banks be brought back, forcing Chairman M Venkaiah Naidu to adjourn the proceedings for about 90 minutes. The TMC had raised the issue in the House.

Interestingly, PTI reported that responding to an RTI query the Finance Ministry had refused to share copy of three reports on the quantum of black money held by Indians inside the country and abroad, saying its disclosure would cause a breach of privilege of Parliament.

Then UPA Government had in 2011 commissioned these studies by Delhi-based National Institute of Public Finance and Policy (NIPFP) and National Council of Applied Economic Research (NCAER) as well as the National Institute of Financial Management (NIFM) in Faridabad.

Replying to an RTI query, it said the study reports of the NIPFP, NCAER and NIFM were received by the Government on December 30, 2013, July 18, 2014, and August 21, 2014, respectively. The Ministry said these reports were submitted to the Standing Committee on Finance on July 21 last year and the committee is now seized of the matter.

“Accordingly, the disclosure of information would cause a breach of privilege of Parliament. Therefore, the information sought is exempt from disclosure under Section 8 (1) (c) of the RTI Act,” it said in reply to the RTI application filed by this PTI correspondent. The section bars information, the disclosure of which would cause a breach of privilege of Parliament.