New Delhi: A secret study commissioned by the Finance Ministry in 2014 says 90 to 97 per cent of the unaccounted wealth or black money was lying inside India and not abroad as claimed all these years and the most of it was in the form of cash.
The report was based on the studies by three premier financial institutions and it was ready by July-August 2014 but it has not been made public till now, a tabloid claimed on Friday, indicating that it may have prompted Prime Minister Modi to go for demonetisation in November 2016 to unearth all black money lying in cash.
Though the three institutes differed in their assessment on the total unaccounted wealth held in India and outside the country, there are some startling details.
The study was instituted after the Parliamentary Standing Committee on Finance discussed the demands for grants in 2009-10. In its second report on December 2, 2009, the committee asked the finance ministry “to conduct a thorough assessment/survey of the unaccounted wealth, particularly bringing out the nature of activities engendering the money laundering both inside and outside India.”
On October 28, 2010, then finance minister Pranab Mukherjee gave an in-principle approval for the study, but the issue dragged on till the National Institute for Public Finance and Policy (NIPFP), the National Council for Applied Economic Research (NCAER) and the National Institute of Financial Management (NIFM) were roped in and the MoUs (memorandum of understanding) were signed with them in March 21, 2011.
The reports of the three institutes came in three batches, the first in December 2013 and the second and third in July and August 2014. After the demonetisation, the standing committee currently headed by Congress MP M Veerappa Moily quizzed the finance ministry about the consolidated report of the three institutes.
The finance ministry sources say the report was made available to the standing committee on July 25, 2017 but they do not know why Moily did not make the report public. He called a meeting of the committee only on Thursday in the wake of BJD MP Bhartruhari Mahtab and BJP MP Nishikant Dubey raised the issue in the just-concluded budget session of the Lok Sabha, demanding that the reports should be made public.
He may circulate the report, but it is now too late when the country is readying for another Lok Sabha elections. The report, however, shows that even the country’s best minds in the financial institutions could not come up with any reliable estimate of the unaccounted wealth inside and outside the country.
While the NCAER report claimed a 2.8 per cent of the GDP mark for outflow of the illegal income, the NIFM estimated the outflow to be 10%. However, both the institutes were unanimous that a greater proportion of the concealed wealth is lying within the domestic economy and only a small fraction has gone outside the country.