Black Money in Switzerland

LK Advani once said Indians had stashed Rs 25 lakh crore in undeclared income outside the country.

An account in a Swiss bank is a status symbol. Often though, it is equated with black money. The rich have for years kept huge funds in Swiss banks. Switzerland manages one-third of all money that is held outside countries of origin. One reason for this is its efficiency in money matters. The second is the watertight confidentiality Swiss banks maintain about clients. 

Now, there is pressure on Indian leaders to get to the root of black money parked in Switzerland.  LK Advani once said Indians had stashed Rs 25 lakh crore in undeclared income outside the country. Research by Global Financial Integrity, a watchdog group, claimed India hid away $137.5 billion in undeclared money between 2002 and 2006, putting it among the top ten countries with illicit flows. Inland Revenue Service states Switzerland is one of 37 financial shelters. Of these, Manmohan Singh said, India had initiated discussions with 20 countries.

President Pratibha Patil told Parliament in March  that the “Government has undertaken a number of steps to unearth unaccounted money parked outside India”. “Renegotiation of the tax treaty with Switzerland is in process. India is an active part of global efforts to facilitate exchange of tax information and to take action against tax evasion,” she said. 

Earlier this week, India took its first steps to making the scenario clearer by amending a double-taxation pact with Switzerland that will lower significant hurdles in obtaining details on bank accounts. But just a day later, Pranab Mukherjee is reported to have said, “As far as Swiss laws are concerned, they don’t give any information of their banking transactions… the only information provided would be for taxation purposes.” (To which the obvious question is: what else does India need the information for?)

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Rahul Bhatia