US-based group Global Financial Integrity has said that India has lost more than $460bn in illegal flight of capital since Independence. It said the illicit outflows increased after economic reforms began in 1991.
India has lost hundreds of billions of dollars over the past six decades as companies and the rich stashed cash overseas to avoid taxes and hide ill-gotten gains, widening inequality and depriving the poor of crucial resources. The gap between India’s rich elite and the poor who number in the hundreds of millions has widened amid rapid economic growth over the past two decades, adding to social tensions and inequality.
High net-worth individuals and private companies were found to be primary drivers of illegal capital flows.
It is said country’s underground economy has been estimated to account for 50% of the country’s GDP – $640bn at the end of 2008.
Supreme Court of India said that the practice of illegal funnelling of wealth overseas by Indians is a pure and simple theft of national money. What the government was doing to retrieve the illegal money in foreign banks, the court wonders.
With the intervention of the Supreme Court of India, it is expected that illegal money will be brought back to country to remove inequality and to deliver social justice to the poor.