Finance, Forex and Investments

What is the background in which alleged Indian black money in Swiss bank had come down to $2.5 billion..?

from the earlier estimates like: Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries : Top Five 1. India ---- $1,456 billion 2. Russia ---$ 470 billion 3. UK -------$390 billion 4. Ukraine - $100 billion 5. China -----$ 96 billion A recent news says: Indians may have over $ 2.5 bn in Swiss banks Press Trust Of India Posted on Jul 25, 2011 Geneva: It's official now - Indians hold about $ 2.5 billion (over Rs 11,000 crore) in Swiss banks, but this figure of Switzerland's central bank may be a gross understatement of the total wealth directly and indirectly held there by entities from India. The ever-growing judicial scrutiny and political outcry over alleged stashing of black money in Swiss banks also seems to be forcing Indian entities to move their monies to other safe havens like the Middle East, Singapore and Mauritius. Some half a billion dollars have been moved out in the last three years, according to the central bank's figures. Now what are your thoughts? Is apex court's apprehensions of lax action by Govt to track black money in tax havens proved true? Is govt helping culprits in their fold to take away their deposits before the govt is pressurised to step in, to do something? Dilli thanks for the info about the misinfo under circulation! 1. But the fact remains that India is losing nearly Rs.240 crore every 24 hours, on average, in illegal financial flows out of the country. The nation lost $213 billion* (roughly Rs.9.7 lakh crore) in illegal capital flight between 1948 and 2008. However, over $125 billion (Rs.5.7 lakh crore) of that was lost in just this decade between 2000-2008, according to a study by Global Financial Integrity (GFI)…. The Hindu November 17, 2010 http://www.thehindu.com/opinion/op-ed/article892140.ece 2. Again your trying to balance the blame among Govt and anti Govt players is also interesting! Indeed I read the following info in an article recently in Dinamani Daily (Dinamani 15.07.2011) too: From 2006-7 to 2009-10 petro companiess have realized a hefty profit of Rs.1,26 lakh crores! Similarly, the govt had earned tax revenue to a hefty level of Rs 3.91 lakh crores from 2005-6 to 2009-10 according to govt statistics itself, besides contd.. besides the dividend from profits, royalty etc accrued to govt! In the same 5 year period, the states have also earned a sizeable income of Rs 72000 crores from petro business according to govt statistics, says PSM Rao (Freelance Columnist and Consultant mfi and livelihood issues) author of the article! Still the govt is bluffing that they have to grant subsidies to balance the ‘’heavy losses’’ to petro companies! You also had raised a Q on this in January this year citing article of the same columnist in DNA: http://in.answers.yahoo.com/question/ind… Thanks for the useful inputs!

Public Comments

1. Firstly I have valid reasons to accept their first admission for a larger amount.and their second statement may be a fabricated one to save their skin from Indian and prospective Internation pressures.Though your doubt over govt's favour to their own entities/persons/culprits can't be ruled out.Swiss Banks ,as per their own banking norms ,are liable to save their customers/subscibers to protect their image of "Heaven For black money hoarders". Now our govt can try to reduce the figure to zero to prove the opposition's actions as defamatory.
2. Now here are some interesting infos: 1. Updated figures per the Swiss Banking Association report 2008 Deposits In Swiss Bank ~ Top 5 India---- $1891 billion Russia----- $610 billion China------ $213 billion UK-------- $210 billion Ukraine ----------- $140 billion Rest of the world ----$300 billion Source: Swiss Banking Association report 2008 Do you know this is more money than ALL the money in ALL the banks in India taken TOGETHER ! http://www.indiabroadband.net/news-discussions/11012-india-tops-swiss-bank-depoits.html 2. Then another source that totally demystifies the ''revelations'' as below (I myself went to the Swiss Bank Assoc Annual report site and confirmed absence of any data like being circulated around!): India's $1.5 trillion in secret swiss bank accounts myth - refuted?! Submitted by viksit on Sun, 01/18/2009 It seems finding turns out, this information was taken from a chain email that was forwarded to a bunch of people by an (as yet) unknown source - and promptly taken up by the smaller sections of the Indian web media, and certain bloggers who ought to have known better. This became mainstream news, people! Almost ALL of them started making moral judgments about the extent of corruption in the country too! :) I was rather intrigued when I saw that there were *Actual* figures posted on these websites. Given the high levels of secrecy which swiss bankers are known for, this seemed rather surprising! Source The organization mentioned - the Swiss Banking Association - fortunately, does exist. And so do their annual reports - available for download, publicly. Their latest report is available on their front page. I used google custom site search to query words like "1456 billion" and "India". Since the german name for India is "Indien", I also tried that, as well as other words I thought might be pertinent. I downloaded most of their reports and gave it a brief glance as well, to no avail. There were absolutely no mentions of any country's deposits, save some tables and charts which highlight their growth, tax treaty information and sovereign wealth fund information. In fact, in the german versions of the 2006 report - there are only some 5 mentions of the word "Indien". The latest report features "India" some 8-10 mentions times, and thats pretty much it. Does anyone have any pointers on whether this information actually exists - perhaps I'm missing something? Seriously though. The web media needs to REALLY do some research before they start proliferating information that is so clearly false. This is rather harmless as misinformation campaigns go, but this sort of collective ineptness in validating your sources (which I thought was one of the cardinal rules of main stream journalism) - highlights just how far this medium has to go before it can be accepted as an authentic source of information. http://www.viksit.com/node/9 ----------------- So in summary, I think the generic doubt expressed in India that the Swiss figure of $2.5 billion is grossly under estimated, remains just a guess due to the falsely authenticated info (citing an Annual Report that has no such info) under circulation! Just like Govt of India says falsehood about petro trading Companies incurring ''heavy losses'' while they are already earning fat profits, just to fool people and help the traders to hike petro prices, the adversaries of govt are also busy fooling people against the Govt.! The dirty game of misinfo seems to be going on briskly on either side! Edit: MS sir, don't be in a hurry, there is still something in the media (not email chain!): A private banker, on condition of anonymity, said that the actual deposits by Indians could be as high as USD 15-20 billion, but also rubbished the figure of USD 1.5 trillion that has been reported from time to time. “I would argue that both the Swiss central bank’s estimate of USD 2.5 billion as deposits of Indians, as well as the Indian media stories of USD 1.5 trillion of Indian private deposits, are incorrect and somewhat outrageous,” he said. “From my involvement with banks, I would place the Indian deposits anywhere between USD 15-20 billion,” the banker said. He also said there was a “perceptible flight of funds” of Indian holders from Swiss banks to banks in Singapore and Dubai, which are now the two main centres for Indian funds from undeclared sources.
3. fake FDI ke jariye India me laya gaya hoga !
4. This is first ever official number from Swiss government all others were speculation. I don't go by speculations.
5. 11000 thousand crore kept in some other country ! Shame,these people have no self respect.
6. Yes, this is a grim situation: Dev Kar, a former International Monetary Fund economist, said that almost three quarters of the illegal money that comprises India's underground economy ends up outside the country. India's underground economy has been estimated to account for 50% of the country's GDP - $640bn at the end of 2008. Mr Kar used a World Bank model to calculate India's missing billions. He compared India's recorded sources of funds, such as foreign direct investment and borrowing, and its recorded use of funds, like foreign currency reserves and deficit financing. Illegal outflows are considered to exist when funds recorded exceed those used. India's exports and imports over the past six decades were also taken into account. Adjusted for inflation, that all added up to $213bn missing since 1948. Taking estimated investment returns into account, Mr Kar calculated that was worth $462bn in today's money. The figure could be much more, he warned, as it did not include smuggling and cash transfers outside the financial system….. Global Financial Integrity, which is based in Washington, studies and campaigns against the cross-border flow of illegal money around the world. It said that the "poor state of governance" had been reflected in a growing underground economy in India since Independence in 1947. Global Financial Integrity director Raymond Baker said the report "puts into stark terms the financial cost of tax evasion, corruption, and other illicit financial practices in India". Some disturbing findings of the GFI are: • The flows are more than twice India's external debt of $230bn. • Total capital flight out of India represents some 16.6% of its GDP. • Some 68% of India's capital loss has happened since the economy opened up in 1991. • "High net-worth individuals" and private companies were found to be primary drivers of illegal capital flows.