While the government continues to tighten the noose around black money hoarders across India, the latest report by the international watchdog Global Financial Integrity (GFI) has revealed that over $21 billion (approx. Rs 1.3 lakh crore) worth of black money was illegally taken out the country in 2014.
For the first time, the GFI has given information on the equally damaging inflow of illegal funds, with India being the destination of a staggering $101 billion (approx. Rs 6.5 lakh crore), around 11 per cent more than the previous year.
In its report, named Illicit Financial Flows to and from Developing Countries: 2005-2014, the GFI has estimated that between $620 and $970 billion was drained out globally, primarily through trade fraud.
Overall, illegal outflows and inflows accounted for 14-24 per cent of total developing country trade over 2005-2014.
The report released by the GFI is more precise than its previous reports as it has been made after collecting and analysing information on international trade and balance of payments. Besides using IMF global data on direction of trade, the report has included information from other sources to plug gaps.
The report has also included Swiss data on gold exports which was omitted in earlier reports. This has led to a drastic revision of India’s outflow and inflow figures.
“Due to India's large imports of gold from Switzerland, rectifying this data issue significantly closed observed bilateral trade gaps between the two countries,” economist Joseph Spanjers, one of the report's authors, was quoted by Times of India as saying.
The report has presented a range of estimates for inflows and outflows for India, like all other countries.
Although both the lower and higher ends are described by the economists as "conservative" because it is difficult to trace all illicit transactions, the higher-end estimates are closer to previous years' estimates while the lower ones take into account only trade gaps with advanced economies, according to Spanjers.
