Tuesday, November 04, 2014
Vasu Reddy From Chicago
India's obsession with money in Switzerland banks is as old as the country's 1947 independence from the British. It might be a story for the movie makers in India and or also to the Mission Impossible franchise. The fact of the matter is that everyone knows that people with big pockets and or political connections will try to stash their money in tax havens to avoid paying their fair share of their in-country taxes, and also people who take money in return for personal or professional help and don't report the commissions, or simply people who take money that doesn't belong to them; all and many more will try to find havens for their ill gotten money to avoid both paying taxes and also reporting the money sources.
Even legitimate business, who work globally will always find tax loopholes to work within the law, and try to reduce the tax burden on corporations; all legal but when exposed becomes a concern for the country and the politicians. The illegal hoarding of money is at best difficult to assess and calculate as it is simply too much money and resources that have been in hiding for so long, and so much more being added each year, it is a matter for some supreme power to unearth all this wealth and money and make it reported income. Achieving 100% account of all money hidden in the world, will only happen with an act of god.
India's current politicians continue to squabble about who is holding money where and how much, and they constantly challenging each other to show the proof. Everyone in India, even a child knows that there is unimaginable amount of money stashed somewhere in India and outside of India by the guys who have their hands out for money from everyone who needs work done. As people pay for work (favors) the guys with their hands out will easily collect their dues, and then start to think of how to protect the ill gotten wealth. The world is a massive place to hide money and wealth and also there are enough safe havens to start spreading the ill gotten wealth in many places to make believe that it is safe. We all know that some countries resist sharing the details, where are some simply work in secrecy and coded system so the tracking is difficult. It is not impossible to track anything in the world, but it is simply made difficult by the banks and financial institutions to go to the source of the accounts, and even more difficult to find the source of acquisition of the wealth. All said and done, with today's electronic infrastructure, it is simply following the course of origin and governments should be able to at least point to the sources of the accounts.
Also protecting the account managers and account holders is not a global monitor as the local laws that govern the banking system of each country in the world. Most times the local laws are written to protect and defend the local citizens, and then aligned with the needs of the international community. India and its government just must accept the process of handling the banking laws and systems around the globe, and start to work with them.
While Modi is constantly assuring the Indians that he and his government will make all efforts to get the money back from abroad, and is trying to do their best in tracing and and tracking the illegal money, it is far from easy to prove the existence of black money/wealth and its origins. Their effort to identify and negotiate with local law enforcement on opening the information is commendable. What is for the government to do, and in its hands is to stop the process of hand stretching when working, meaning stop people from accepting and encouraging bribes. Modi himself is a great example of being above fray in money matters, as time and again his strength is that he will not involve in accepting money for favors. He simply should lean on his government to follow his principle, and it will stop the politicians from looting public wealth, and will also stop national wealth into tax havens.
This government and any government should identify and prosecute the money launderers and looters, while also looking forward to changing the system itself in promoting open and good governance that stops the looting. Modi for better than any other reason can be the leader in eliminating graft, and there by eliminating the issues with money laundering in governance, and further enhancing the use of public resources for public works.
While taking actions to track and prosecute the old felonies that involve decades of looting, it is of greater importance for this government to stop the cause of the money grabbing. On both fronts actions on working with international communities and banks, and also continuously monitoring the internal systems to promote clean and good governance, will help stem the age old problem of graft. Keeping the issue of good governance on the top of the agenda for the central, state and local governance will begin the process of stemming the graft that is so deeply rooted in the society. If this government continuously makes this a governance issue, India can slowly become a nation of laws that are followed by its politicians, bureaucrats and its citizens.