Swiss Bank data puts Modi govt in damage control mode

Swiss Bank data puts Modi govt in damage control mode

Mangalore Today News Network

New Delhi, Jun 30, 2018 : The muscular crackdown against black money trumpeted by the Narendra Modi government has come to haunt the BJP. The Swiss National Bank (SNB), official annual data laying down that the money parked by Indians in Swiss banks rose by over 50 per cent to Rs 7,000 crore in 2017 has cracked the halo as the BJP for years has built a narrative that deposits made in "Swiss banks are dirty".

 

The Indian case stands out as in comparison, the total funds held by all foreign clients of Swiss banks rose only 3 per cent to Rs 100 lakh crore. The opposition erupted, using the data to target the government. The Congress president set the tone with a tweet. What’s hurting the government is that there has been a reversal of a three-year downward trend.

In 2016, funds stashed by Indians in Swiss banks had fallen by 45 per cent to Rs 4,500 crore. The drop was the highest since the Swiss banks shed their secrecy clauses that shielded depositors in 1987. The latest data shows that the money parked directly with the banks is now pegged at CHF 999 million (Rs 6,891 crore) and another CHF 16.2 million (Rs 112 crore) through fiduciaries.

The data depicting the surge in Indian money held with Swiss banks caught the government off guard. As the government which has been busy showcasing its clampdown on suspected illegitimate money and signing agreements with the Swiss for information sharing.

PIYUSH GOYAL EXPLAINS

The government hit the damage control button. Acting finance minister Piyush Goyal was first to react. He said,"Rs 1.5 crore is legally allowed to be sent outside India and the jump in deposits is not unprecedented. Due to the agreement between India and Switzerland, Swiss banks will share all details of financial data of Indian nationals at the end of financial year. The government is keeping a close eye. If black money is found in Swiss banks then government will take appropriate action. India and Switzerland signed an agreement to release all tax related transactions from January 2018." The opposition had found ammunition. West Bengal chief minister Mamata Banerjee tweeted : Bravo! #DeMonetisation? Swiss Bank money flying. India losing.

ARUN JAITLEY CLARIFIES

As the opposition’s narrative gained ground cabinet minister Arun Jaitley posted a blog on site Facebook asking the opposition to "understand the basics" He countered the opposition by claiming that not all of the Rs 7000 crore shown in the SNB data was black money. He said," Any illegal depositor knows that it is a matter of months before his name becomes public and he will be subjected to the harsh penal provisions of the black money law in India." He termed the reaction to the news item related to an increase of money by ’Indians’ in the Swiss banking system as misinformed. To check the damage he claimed that real time flow of information with regard to Indians will be starting in January, 2019.

THE INSIDE PICTURE

The government is scrambling to secure some information on the Rs 7000 crore figure from the Swiss central bank. The tax department will work on data but for proper verification it would have to wait for the end of the return filing period on July 31. Sources say that though the figure is large but not more than 15-20 per cent of it might be illegitimate money.

Interestingly finance ministry sources said that legitimate investments or deposits in countries like UK could far outstrip the stash in Swiss banks as using the liberalised schemes more Indians are investing and depositing abroad.

A senior finance ministry official said,"Things have changed. More Indians are investing abroad. As businesses expand Indian corporates are now depositing mony in banks in foreign lands and that cannot be branded as illegitimate."

A senior minister said, "The situation is not as alarming as it was say a decade ago when the total funds held by Indians with Swiss banks stood at Rs 23,000 crore in December 2006."

The other worry for the Govt is that the funds, categorised by SNB as ’liabilities’ of Swiss banks, do not enlist the amount of money hoarded by Indians or the money from different countries.


courtesy: yahoo