- POSTED: 28 May 2014 20:00
- UPDATED: 28 May 2014 22:32
Indian Prime Minister Narendra Modi has set up a special investigation team to track illicit funds that have been mostly stashed abroad. Reports have estimated that up to US$1.4 trillion of such illegal money are deposited in tax havens abroad.
NEW DELHI: In his first cabinet meeting, Indian Prime Minister Narendra Modi announced the setting up of a high-profile Special Investigation Team (SIT) to unearth illicit money that have been stashed abroad.
The team will be headed by former Supreme Court judge M B Shah.
The director of India's Central Bureau of Investigation had said in 2012 that most of these funds are parked abroad in tax havens such as Mauritius and Switzerland.
India's law minister, Ravi Shankar Prasad, said: "It is a matter of great assurance for us that in the very first cabinet meeting of the new government headed by the honourable Prime Minister Shri Narendra Modi, in the light of the directions of the honourable Supreme Court, we have constituted an SIT for unearthing black money."
India's Supreme Court had last week given the government one week to form the SIT for the probing of these so-called "black money" cases.
Black money refers to funds that are earned and transferred illegally, on which income and other taxes have not been paid.
Surveys suggest India could be in fiscal surplus if the government manages to recover at least a tenth of these illicit funds.
Although it is a difficult task, legal experts feel that the Modi government has taken a step in the right direction.
Ram Jeth Malani, a senior advocate in India, said: "They have formed an SIT -- the first step that the Modi government has taken in response to Supreme Court's direction, but a lot of work is yet to be done. They have to improve the system, give additional powers to the investigating team, probe laws, etc."
While the new government's initiative has been largely welcomed, some critics said the BJP should first look internally to find such funds.
Rahul Mehra, a leader in the Aam Aadmi Party, said: "I don't see much into it... until BJP also brings about a legislation where all political parties, by force through the legislature, are supposed to divulge every single penny and they do not take recourse to the anomaly of law, which has been created by the legislatures to protect themselves."
Investigative teams have been formed in the past, yet the perils and problems of the ever expanding magnitude of such unaccounted funds still continue to haunt the Indian economy.
The real question is whether the Modi government will follow through and succeed in winning the country's battle in recovering generations of such unaccounted money.