Given how the government has released just three names of the supposed hundreds of Indians who have billions of dollars of black money stashed away in Swiss, and Swiss-type, bank vaults, there has been the predictable protest from the usual suspects, perhaps why the Supreme Court has asked the government to give it all the names it has got of Indians with Swiss bank accounts. To a certain extent, this is poetic justice since it was BJP leaders like LK Advani that over-politicised the black money issue by using the Global Financial Integrity (GFI) figure of how Indians had $462 billion of funds stashed away overseas; others like Baba Ramdev multiplied this manifold. It can be no one’s claim that Indians do not have black money stashed in Swiss and other vaults, but some perspective is needed. Given how tax rates in the country have come down dramatically over the years, it does seem unlikely that the amount of money being siphoned off to overseas locations should rise as fast as GFI estimates —falling from $45 billion in 2008 to $29 billion in 2009 and then jumping to $68 billion in 2010 and $85 billion in 2011. But even if you agree with this, keep in mind the 2011 number is under 5% of GDP for that year, minuscule by any standards. In other words, the taxman and the government would do much better by simply focusing on catching more black money at home. Nor is it certain this money hasn’t already come back home. Keep in mind the years when GFI believes the overseas siphoning grew the most were also the years of highest growth, when returns to investments were the highest in India—it would be a very unfortunate black marketer who missed out on the huge returns to be got in India by simply parking funds overseas; and weren’t the PN schemes run by FIIs supposed to be an instrument to get Indian money back into the country?
Apart from the issue of whether this money was generated by India Inc or by politicians – these were the years when social spending levels, with their attendant leakages, rose the most – there is the issue of how much of this is actually black money. Which is why finance minister Arun Jaitley has done well to reiterate that only the names of those against whom there is prosecutable evidence will be made public. While it is important to wait for the results of the probe the Supreme Court will almost certainly order later today after the government gives it the 628 names it has got from Swiss and other banks, some preliminary facts are worth keeping in mind. As The Indian Express pointed out last week, only about a fifth of those named in the HSBC list have acknowledged the ownership of the accounts, several names have been repeated twice as there are joint accounts and the highest balance in the accounts is $18 million. Worth investigating, but not the kind of stuff that should set the nation’s pulses racing in the manner it has.