Can India’s premier make good his promise to get the black money stashed in foreign banks back to the country? It is a huge claim and although almost 700 names running such accounts now lie with the Supreme Court in an envelope, there will be a major chasm between the revelations and the retrieval.
Most very wealthy people who salt away money are not likely to do it under their names. There would be at least a half a dozen cutouts and bagmen who cover for them. Ergo, it would be a monumental exercise in legalities and sleuthing by the Excise department to make the connection between the money and its faux owner and the real target.
You might get the money but will you get the right person? Also, since none of this was secret with Modi making it a plank on his political platform you would think the very rich would have camouflaged their accounts, closed them or simply moved most of the money out to other places more in fashion and a lot more confidentiality than the dreary old Swiss concept of hiding cold cash.
The one weak link might be the canaries. If the cutouts begin to sing and tell all then chasing the paper trail could get that much easier. That would depend on the inducement level and the pressure placed on them. As things stand SEBI is currently active in probing three global banks in Europe and the domino effect can be seen. After India’s demands to the Swiss, it is believed millions were pulled out from the Swiss banks and there is a sense of crisis in their vaults and they were not all Indians. The Modi initiative could catch on with other nations.
It is both popular and populist and politically gives the incumbent a very strong hand to play with. The repercussions could hold the headlines for weeks on end and Modi has enough sense of theatre to even impress William Shakespeare.
The Swiss have not only found their fiscal cheese has holes in it but there could be an ironical legal action from those they have listed in the surrender for having broken the confidentiality clause. We gave you our money and you were not supposed to tell. So, while an individual might face action on the Indian front he can also take action on the Swiss front.
Among those who will also take a fall will be individual bankers and investment fund brokers who aided the process and have created the channels for the disbursement and the covering up. Consequently, each account will be like an onion, with layers surrounding the core. Modi may have unwittingly caused a worldwide tremor because it is just Indians who are withdrawing or closing accounts; there is a possible run on the so-called venerable financial institutions of Geneva and Zurich. The Swiss are also exercising more vigilance. The funds that came to them in an earlier era were not always questioned. But with terrorism, drug trafficking and crime syndicates in operation, there has become such a commodity as dirty money. And even these offshore havens have raised their standards not wanting to become party to international probes. The conclusion is simple. Hiding your money isn’t that easy anymore?
The only fear is that this exercise, laudable as it is, should not collapse into a witch-hunt. Too much media conjecture and second-guessing will add to the confusion and the baying for blood may drown out the sanity needed to indict those who have engaged in fraud. Also Indians cannot be naïve. With a black economy at home that is robust and often more buoyant than the genuine article, the fact that foreign-based accounts exist has been known for decades. We cannot now gasp in wonderment at this revelation. It is not a revelation.
While not being an expert on the legal niceties it is difficult to locate the virtue in maintaining secrecy over the lists. After all, if the whole idea of the strategy is to strip away the secrecy then would it not be better to inform those who are on the list that they are liable and need to explain themselves. I am just a little concerned that the herd of scapegoats will grow exponentially with each passing day.
