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HAWALA AND LOOTED MONEY STASHED AWAY IN TAX HAVENS (e.g. SWISS ACCOUNTS)

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Feb 20, 2010, 9:01:02 PM2/20/10
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Forwarded message from S. Kalyanaraman

Hawala and looted money stashed away in tax havens (e.g. Swiss accounts)

Saturday, February 20, 2010

Shouldn't the recovery of looted wealth be a matter of concern for RBI?

S. Kalyanaraman

http://sites.google.com/site/hindunew/recovering-looted-wealth

I-T officer is off Koda probe just before hitting paydirt

Pradeep Thakur & Sonali Das, TNN, Feb 21, 2010, 12.44am IST

New Delhi/Ranchi: Ujjawal Chaudhary, senior Income Tax (I-T) officer,
who led the probe into the multi-crore Madhu Koda scam, may have been
on the verge of unravelling the link between politicians and hawala
traders when he was abruptly shifted this week.

Sources said the team led by Chaudhary, who has been taken off the
Koda probe and moved to the assessment wing, had gathered strong
evidence linking politicians and others to hawala operators engaged
in laundering black money abroad. Chaudhary was transferred when
raids were still continuing at Chaibasa in Jharkhand.

The official and his colleagues are learnt to have hit a `jackpot'
during their raids on Pune-based businessman Ajay Bafna, who was
under surveillance since October last year when the first indication
of his dealings with Sanjay Chaudhary, close associate of the former
Jharkhand chief minister Madhu Koda, surfaced.

The team struck gold also while raiding two hawala traders in Delhi.
The search of the business premises of one Vipin Kapoor, a hawala
operator based in Karol Bagh, yielded details of accounts of banks in
Switzerland and other countries which seem to belong to politicians.

Kapoor is a familiar face for tax authorities, having been convicted
for gold smuggling earlier. But evidence seized from him surprised
the raiding team given the likely connections with influential
accounts.

Within Jharkhand, raids by I-T personnel led by Chaudhary over three
days beginning February 16, reveaked disclosures of hundreds of
crores in concealed incomes of bureaucrats and businessmen. Those
targeted included Manohar Lal Pal, personal aide to current Jharkhand
chief minister Shibu Soren.

A former employee of Coal India Limited who was sacked for allegedly
forging his educational qualifications, Pal, faced with evidence,
declared assets and investments totalling up to Rs 65 crore.
Similarly, two businessmen engaged in mining -- much of it allegedly
illegal -- have also admitted to having concealed Rs 30 crore from
the tax authorities. A similar admission from a Kolkata-based
chartered accountant, accused of helping the scamsters fudge accounts
and who was confronted with papers showing he had not declared income
worth Rs 12 crore, had appeared to be on the cards when Chaudhary was
called off.

The findings of the investigation have generated a sensation in
Jharkhand and other places like Delhi and Mumbai as slueths unearthed
sordid details of the brazen loot of public money. Those who are
facing charges include officials as well as engineers working in the
mining and electricity departments.

In one particular instance, the team stumbled upon payment of Rs 4.6
crore allegedly made by cheque to functionaries of the Koda
administration by an Andhra Pradesh-based construction company. In
return, the company was allegedly allowed to inflate the cost of the
project it was assigned under the Rajiv Gandhi Gramin Vidyutikaran
Yojana.

The explanation offered by the tax authorities makes Chaudhary's
transfer seem innocuous. "He will be based in Patna and his
jurisdictions will include both Bihar and Jharkhand. He has just been
shifted to the assessment wing because he is best placed to assess
the value of whatever the accused in the Koda scam and others have
been found to possess," it was said.

This does not wash with many because officers are seldom transferred
mid-way through an investigation. Chaudhary, having spent just seven
months at the last station, was not due for a transfer either. He
took charge of the investigation on July 14, 2009.

What is puzzling political circles is that the I-T's investigation is
all against politicians who, with the exception of NCP's Kamlesh
Singh, former colleague of Koda, are not part of the UPA. In fact,
many in Congress would be relishing the discomfiture of Shibu Soren
over the raid on Pal, considering that he preferred the BJP for an
alliance.

Chaudhary's transfer has been taken to the judiciary, with a group of
lawyers seeking the intervention of the Jharkhand High Court which is
hearing the PIL against Koda.

But members of his team remain wary of more transfers. It is learnt
that even during the course of investigation, Chaudhary and his team
mates did not get enough cooperation while probing business dealings
of Koda and his associates in Mumbai and elsewhere.

http://timesofindia.indiatimes.com/india/I-T-officer-is-off-Koda-probe-just-before-hitting-paydirt/articleshow/5597356.cms

End of forwarded message from S. Kalyanaraman

Jai Maharaj, Jyotishi
Om Shanti

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Black Money Monster, Alive and Kicking: Sid Harth

bademiyansubhanallah View profile
(1 user) More options Jul 15 2009, 8:30 am

Newsgroups: soc.culture.indian, soc.culture.indian.marathi
From: bademiyansubhanallah <elcidha...@gmail.com>
Date: Wed, 15 Jul 2009 06:30:20 -0700 (PDT)
Local: Wed, Jul 15 2009 8:30 am

Subject: Black Money Monster, Alive and Kicking: Sid Harth

Black money: In dialogue with Swiss officials, says Pranab15 Comments
Express news service

Posted: Wednesday, Jul 15, 2009 at 1255 hrs

Finance Minister Pranab Mukherjee on Tuesday said that New Delhi has
initiated a dialogue with Swiss authorities to obtain information on
Indian black money stashed away in banks there — an issue that had
raised much political heat during the elections with BJP leader L K
Advani making it a major poll plank.

Mukherjee, at the same time, said the Government has no plans to
bring
in a new amnesty scheme for tax evaders, pointing out that in the
past
there have been complaints that the government was penalising the
honest tax payer as in every such scheme the normal rate of tax was
reduced. Efforts to amend the Indo-Mauritius tax treaty to curb its
abuse, however, are being pursued, he said.

Mukherjee said Swiss banks had until now taken a position that they
would not divulge information but as a consequence of global
meltdown,
there is pressure by OECD countries to bring in more transparency and
revision of the Avoidance of Double Taxation Agreements. “I am told
that the Swiss authorities have ultimately agreed to enter into
negotiations,” he told the Rajya Sabha while claiming that the
government is working to revise Double Tax Avoidance Agreements,
particularly the secrecy clause, which it has with other countries.
“It is an international commitment. Unilaterally, we cannot simply
ignore it. If we ignore it, then further sources of information will
be dried out. We are, therefore, negotiating with them,” he said.


As far as the new amnesty scheme is concerned, he said, “We are not
very enamoured to have another type of disclosure scheme,” adding
that
the government was in talks with Mauritius to amend the tax treaty to
check companies evading paying taxes in both countries. Delhi has
also
offered to compensate the Mauritius for any loss in revenues because
of a change in the treaty.

Comments

SWISS MONEY WILL NEVER SEE INDIAN SHORE - SORRY
By: n.r.i | 15-Jul-2009

SWISS MONEY STASHED BY INDIAN CITIZEN WILL NEVER SEE INDIAN SHORE AS
FAR AS ENGLISH MEDIA AND CONGRESS GOVERMENT IS CONCERNED AND HAS
POWER . I HOPE I.E. WILL PRINT THIS COMMENT .

Indian Black Money Abroad
By: Anil Gupta | 15-Jul-2009

Sir, Just talking with Swiss authorities will not help in bringing
back Indian money stashed away in foreign banks.If the GOI is serious
about it they should first make an amendment in FEMA and Money
laundering Act to the effect that any amount above a particular level
deposited by any Indian without informing the RBI and GOI the same
shall automatically vest in the Government of India.Thereafter,the
GOI
can ask the Bank concerned to handover the money to the GOI.According
to one estimate the money stashed away clandestinely in foreign banks
is to the tune of 90 lac crores of rupees that is about 1900 billion
US $.

Nothing will come out they will be fooling the people!!
By: Rajendran | 15-Jul-2009

Nothing is going to come out these fellows will be fooling the people
for some time and then forget it.When it is time for the next
elections this issue will again come out and then also Mr Pranab
Mukerjee will be telling the media and the people that still he is
talking to the concerned government. End result a salaried employee
with all the strain and distress has to pay his tax or else he will
be
punished and a politician who has stacked unaccounted money in
various
foriegn banks will go scott free,That is India and its Government
Hats
off to them>>>

Swiss Bank Accounts.
By: RN | 15-Jul-2009

Indians will be day dreaming for any Politician / Minister to bring
back the money in Swiss Bank Accounts - for at least 80 - 90% of
these
Accounts will be belonging to the Politicians in their own name or
"benaami" accounts. Least UPA will be doing it, as their well wishers
will account for majority of it; evidenced by the release of Mr. Q.
If
at all this happens, it will happen in due course, after allowing
sufficient time for those accounts to be shifted to another safer
place, and for name sake 1 or 2 names will be declared publically.
Before going to Swiss Banks, let the Government verify the source of
the politicians money in India itself, if they dare to do so. All
these are very unlikely to happen - especially when Pranabda declared
that he is not going to contest next Lok Sabha election - so why to
take unnecessary headaches? Indians are fools and will remain fools -
that's why only 55% of electroate go to polling booths.

Black Money in SWISS-Bank
By: Prof. G.Sharma | 15-Jul-2009
I honestly hope that Finance Minister would be serious enough to get
back the Black Money parked in the SWISS-Bank to our National Bank
(RBI), in order to atleast improve India's FISCAL-Deficit Position.
If
used properly, it would also help the economically poor people to
look
after their health, shelter, food etc. in our poor country (with BPL
level touching around 30%). And, punish the corrupt persons engaged
in
Black Money transactions.

...and I am Sid Harth

Sid Harth View profile
More options Jul 15 2009, 8:59 am

Newsgroups: soc.culture.indian, soc.culture.indian.marathi
From: Sid Harth <sharth...@yahoo.com>
Date: Wed, 15 Jul 2009 06:59:03 -0700 (PDT)
Local: Wed, Jul 15 2009 8:59 am

Subject: Re: Black Money Monster, Alive and Kicking: Sid Harth

No plans for tax amnesty scheme, says Pranab

K.V. Prasad

NEW DELHI: The government informed the Rajya Sabha on Tuesday that
there was no proposal under its consideration to introduce any new
tax
amnesty scheme. Steps were being planned to amend the Double Taxation
Avoidance Treaty (DTAT) with Mauritius to prevent abuse by companies
of its provisions.

Responding to supplementaries during question hour on schemes to
unearth black money, Finance Minister Pranab Mukherjee said the
government was “not enamoured of (introducing) another disclosure
scheme,” and that such schemes could not succeed unless the rate of
taxation was de-linked from current rates.

Such a policy had been criticised on the ground that it amounted to
penalising honest people who paid taxes at a (prevailing) higher
rate.

To questions on the recovery of tax arrears, Mr. Mukherjee said not
all cases fell under evasion, and that it could be a disagreement
over
the assessment of the tax authorities and the tax payer.

Information from Swiss banks

On the issue of getting information from Swiss banks, Mr. Mukherjee
said the Leader of the Opposition in the Lok Sabha L.K. Advani had
written to the Prime Minister to take an initiative.

He said that while the government had sought the opinion of the
Solicitor-General on the issuance of Letters Rogatory, it planned to
negotiate with the Swiss authorities on DTAT for transparency in the
exchange of information.

On the Mauritius route of investment, Mr. Mukherjee said the
government was seeking an amendment to the Treaty, wherein offshore
firms resident in Mauritius were exempt from tax on capital gains.

He said India had offered to compensate Mauritius for any deemed
losses, since it was a friendly country that wanted to build itself
as
a financial hub. Mauritius did not tax companies, including Foreign
Institutional Investors registering with it, for investing in
overseas
markets such as India.

In his written response, Mr. Mukherjee said there was no official
estimate of the amount of black money in and outside the country.

A study by the National Institute of Public Finance and Policy in
1985
estimated it to be between Rs.31,584 crore and Rs.36,786 crore. The
authors of the report said it was based on numerous assumptions and
approximations, each of which could be challenged.

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Feb 21, 2010, 3:39:22 PM2/21/10
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Saturday, February 20, 2010

S. Kalyanaraman

http://sites.google.com/site/hindunew/recovering-looted-wealth

http://timesofindia.indiatimes.com/india/I-T-officer-is-off-Koda-probe-just-before-hitting-paydirt/articleshow/5597356.cms

End of forwarded message from S. Kalyanaraman

Jai Maharaj, Jyotishi
Om Shanti

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chhotemianinshallah

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Feb 22, 2010, 7:46:30 AM2/22/10
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Three cops held on corruption charges
Staff Reporter

NEW DELHI: Three policemen have been arrested by the Anti-Corruption
Branch of the Delhi Government on corruption charges.

The ACB received a complaint from a man alleging that ASI Jagat Singh
of the Jafarpur Kalan police station had been demanding money for
having helped his son get bail. It is alleged that on being promised
Rs.5,000 the policeman assisted the complainant’s son obtain bail.

Acting on the complaint, the ACB laid a trap and arrested the ASI when
he was allegedly accepting the money on Wednesday. It is learnt that
the ACB had received another complaint against the same policeman by
Balbir Singh alleging that he had been demanding money to book his son
under provisions attracting lesser punishment.

In another case, the police arrested Head Constable Ajay Maan, who was
posted at the Vivek Vihar police station, for allegedly demanding Rs.
50,000 from some persons to favour them in a case registered against
them.

The case had been registered on the basis of a complaint lodged by a
woman alleging that her landlord and some others had threatened her.
Ajay Maan, who was investigating the case, allegedly demanded a bribe
from the accused and was accepting Rs.15,000 at the factory of the
landlord when he was arrested. The complainants had also recorded
conversations with the policeman to gather evidence, sources said.

Ashok Bhadana, an S-on probation posted with the Karawal Nagar police
station, has been arrested for allegedly demanding and accepting a
bribe of Rs.1,000 from a person to file an “untraced” report in a
motorcycle-theft case. The three accused have been sent to judicial
custody.

http://www.hinduonnet.com/2009/11/21/stories/2009112157840400.htm

COVER STORY
Accounts of corruption

SINCE April-May 2008, the Central government has insisted that NREGA
wages be paid exclusively through savings accounts opened for workers
in nearby banks and post offices. A major public relations campaign
has tried to present this as a solution to corruption. So much so, the
progress of the NREGA is being measured in terms of the number of
accounts opened – an impressive 4.22 crore, according to a recent
statement by the Rural Development Minister’s office. This
extraordinary investment of energies must, however, be viewed with
caution. A recent social audit of the NREGA at Karon block in
Jharkhand’s Deogarh district showed that corruption persisted, at
times with the collusion of banks themselves.

Deogarh scam

Manchan Rajwar of Ranidih panchayat had no reason to suspect that his
NREGA account at the Deoghar-Jamtara Cooperative Bank had been
activated. Severely crippled, he had not worked at the site where his
name figured, nor signed any withdrawal slips. His passbook was blank.
However, an inspection of bank records (during a social audit in
October 2008) revealed that many transactions had been made over a
whole year. It turned out that middlemen were siphoning off NREGA
funds through his account in collusion with bank officials.

Similar tricks were played on many other workers in Ranidih, and also
in Ganjebari panchayat where they were paid through the post office at
Madankatta. The amounts moving through these accounts could add up to
as much as Rs.9,000 within 14 months for a single account.

Even where collusion is not as blatant as in Ranidih, making payments
through banks is fraught with vulnerabilities. First, little effort
has been made to integrate bank payments with other transparency
safeguards, such as payment of wages in public and regular updating of
job cards. In fact, there is a dangerous tendency to assume that these
safeguards are redundant when wages are paid through banks or post
offices.

In Dungarpur district in Rajasthan, the traditional safeguards worked,
and bank payments were – at least initially – a step back. Where bank
payments were in place, we found (in our May-June 2008 survey) that
job cards were not updated and that muster rolls were no longer read
out in public at the time of wage payments.

Second, bank payments have often increased delays in wage payments. In
Rajasthan, for instance, where wages used to be paid regularly,
teething problems with bank payments last summer caused delays of up
to 50 days. Such delays cannot be tided over by NREGA workers and must
be treated as a serious violation of the Act.

The combination of opaque procedures and delayed payments has created
new opportunities for middlemen. Many middlemen have privileged access
to panchayat- and block-level officials and are often the first to
know when wages have been credited. They then collect workers (both
real and fake) and escort them to the bank. There, a combination of
loans, coercion and (sometimes) monetary enticements is used to induce
workers to hand over the money they have withdrawn. At Karon block,
workers from Mahua Tand, Tekra and Ganjebari panchayats stated
publicly that this had happened. They had been paid in cash at the
rate of Rs.60-70 a day, while the stipulated minimum wage was Rs.
86.40. In some cases, middlemen collude with the panchayat sevak to
inflate muster rolls, steer the inflated payments through people’s
bank accounts and pocket the difference.

New complications

Bank payments have also resulted in new complications. For instance,
banking procedures have not been publicised at all. Most workers do
not know how to operate bank accounts. This, in turn, increases their
dependence on intermediaries.

Another serious irregularity in many places is the opening of accounts
solely in the name of the male head of the family. This makes it hard
for women to keep their own wages. Other problems include extractions
from workers to open accounts; people without accounts being turned
away from worksites; workers having to spend time and money to
withdraw their wages when banks are far away; and staff shortages in
banks and post offices.

So far, the introduction of payments through banks has been little
more than a stampede for opening accounts. Crucial guidelines and
safeguards have been ignored. Consequently, the aim of ending
corruption in wage payments has not been achieved. This can only
happen when bank payments are combined with other transparency
safeguards, as has happened to some extent (with post office payments)
in Andhra Pradesh. Otherwise, as is already happening, new
vulnerabilities will get entrenched.

On the bright side, this experience has demonstrated the Centre’s
ability to enforce critical guidelines. This power could be used to
put in place a more comprehensive structure of vigilance and
transparency.

Anish Vanaik

Volume 26 - Issue 01 :: Jan. 03-16, 2009
INDIA'S NATIONAL MAGAZINE
from the publishers of THE HINDU

http://www.hinduonnet.com/fline/fl2601/stories/20090116260102100.htm

COVER STORY
Banned but still there

CONTRACTORS are banned for work under the NREGA, but the survey found
that they were in fact involved at 27 per cent of the sample
worksites. The worst State in this respect was Jharkhand, where
contractors were found at more than half (57 per cent) the sample
worksites. A common excuse for this is the shortage of staff: gram
panchayats, the main implementing agencies for NREGA work, do not
exist in Jharkhand. In fact, it is the only State that has not held
elections to panchayati raj institutions since the 73rd and 74th
amendments to the Constitution.

The survey teams encountered contractors to varying extents in all the
States except Rajasthan. Often, they get a foot in the door on account
of delays in the flow of funds. When funds are delayed, contractors
step in to ensure timely payment to labourers and suppliers. In
return, they are given a free hand in forging muster rolls, job cards
and other NREGA documents.

Why is the involvement of contractors such a big issue? This question
has to be seen in the light of the unscrupulous character of most
contractors in rural India. They are there to make money, in a highly
competitive environment where cheating and exploitation is the way to
get ahead.

The semi-criminal, petty contractor, roaming around on a motorcycle,
wearing dark glasses and a scarf and chewing paan, is not a fictitious
Bollywood character – he is a familiar figure in most Indian
villages.

On a more serious note, the survey findings amply confirm that private
contractors are best kept at bay. This is so for at least three
reasons:

Corruption: Corruption levels tend to be higher where contractors are
involved. For instance, in a survey in Orissa in October 2007, we
found higher rates of embezzlement of wages at worksites managed by
contractors. Worksites with contractors were more likely to have
muster rolls with fake names. More than half (55 per cent) of the
wages did not reach the labourers concerned, whereas the figure was
low (25 per cent) for contractor-free worksites.

Exploitation: Contractors typically thrive by exploiting labourers –
making them work hard and paying them as little as possible. This
often goes hand in hand with harassment. For instance, 35 per cent of
the women working at contractor-managed worksites reported being
harassed. This figure is much lower (8 per cent) for contractor-free
worksites.

At one worksite in Surguja district (Chhattisgarh), women were
verbally abused for working too slowly; the contractor made them work
for 10 hours a day and turned away those who came late.

At another worksite, also in Surguja, the survey team noted: “The
women who complained about these work conditions were verbally abused
by the contractor, who also threatened to replace them with workers
from other gram panchayats. Our team learned from a worker that these
workers from other gram panchayats were paid at the rate of Rs.50 a
day.”

Accountability: It is easier to keep gram panchayats or Line
Departments’ employees on their toes than to hold private contractors
accountable. In fact, in our experience, contractors are very
difficult to “catch” even when there is proof of their mischief.

For instance, at Masmohna in Jharkhand’s Koderma district, the survey
team found conclusive evidence that a private contractor had cheated
NREGA workers and embezzled their wages. This evidence was presented
at a massive public hearing attended by three members of the Central
Employment Guarantee Council (on June 18, 2008) and confirmed again in
a detailed follow-up by the Koderma Sub-Divisional Officer (SDO).

Yet, in the first information report (FIR) lodged against the
culprits, which is supposed to be based on this very inquiry, the
contractor’s name is missing. He apparently has the “protection” of
the local Member of the Legislative Assembly.

Patronage

Many contractors enjoy the patronage of political leaders (and return
this favour by funding election campaigns). This nexus of corruption
and crime, which also involves corrupt bureaucrats, has been the bane
of public works programmes for many years.

The NREGA seeks to break this nexus and replace it with a transparent
and accountable system where panchayati raj institutions are in
charge. If this new system is to see the light of day, contractors
have to be kept at bay.

Jean Dreze and Reetika Khera

Volume 26 - Issue 01 :: Jan. 03-16, 2009
INDIA'S NATIONAL MAGAZINE
from the publishers of THE HINDU

http://www.hinduonnet.com/fline/fl2601/stories/20090116260101400.htm

Cover STORY
All is not well with the wells

OCTOBER 2008: The fields of Mahua Tand in Jharkhand’s Deogarh district
are full of wheat. Farmers and field hands are busy irrigating their
lands. The rains have not been very helpful this year, and pumpsets
and wells are the saviours of crops. Our social audit team is
inspecting two NREGA projects in Mahua Tand, both involving the
construction of a well on private land – a common type of NREGA work
in Jharkhand.

The well constructed by Taufique Zarra reminds the team of the tragic
Tapas Soren episode. In the short video recording of his last words
(available at www.youtube.com), Tapas Soren testifies that a corrupt
government machinery had driven him to take his own life. He had tried
to construct a well on his own land under the NREGA but was unable to
cope with the frequent demands for bribes. A helpless and distraught
Tapas set himself ablaze at the Collector’s office in Hazaribagh to
highlight his plight and warn others about this trap. But Taufique,
unaware of Tapas’ fate, fell into the same trap.

Taufique hails from a below-poverty-line (BPL) family and his sole
source of income is the little agricultural land he owns. In the
absence of a reliable source of irrigation, he is often at the mercy
of unpredictable rain. Having heard that wells can be constructed on
the land of BPL families under the NREGA, Taufique applied. Soon
enough, he was informed that if he could pay Rs.2,500, a well would be
allotted to him, he said. The NREGA mandates that a shelf of works be
prepared in the gram sabha, but no such attempt was made in Mahaua
Tand.

He said he paid the bribe and the well was sanctioned, and he became
both the beneficiary and abhikarta (manager) of the project. As an
abhikarta Taufique signed an agreement with the government and was in
charge of executing the work. He was to fill the muster rolls,
purchase materials and oversee the worksite. He also had to pay
workers’ wages and for materials as the work progressed, but funds
were often delayed and depended on his ability to pay the
“PC” (percentage, a term for illegal commissions) to government
functionaries. The PC had to be given in cash before the bill for his
payment was passed, he alleged. Taufique took a loan of Rs.20,000,
sold a buffalo and mortgaged his land to arrange for the PC and the
construction costs.

For Taufique, this well was a chance to escape poverty but today, he
says, he is struggling to make ends meet. Luckily, Taufique was not
driven to suicide. But the whole PC system did push him into a web of
indebtedness. Maybe for every Taufique who survives this gamble, there
is a Tapas Soren who may not.

Kamayani Swami

Volume 26 - Issue 01 :: Jan. 03-16, 2009
INDIA'S NATIONAL MAGAZINE
from the publishers of THE HINDU

http://www.hinduonnet.com/fline/fl2601/stories/20090116260101700.htm

ESSAY

Corruption and human rights

The human right to corruption-free service - some constitutional and
international perspectives.
C. RAJ KUMAR

The first part of a two-part article.

IN his book Taking Rights Seriously Ronald Dworkin argued: "The
institution of rights against the government is not a gift of God, or
an ancient ritual, or a national sport. It is a complex and
troublesome practice that makes the government's job of securing the
general benefit more difficult and more expensive, and it would be a
frivolous and wrongful practice unless it served some point. Anyone
who professes to take rights seriously, and who praises our government
for respecting them, must have some sense of what that point is. He
must accept, at the minimum, one or both of two important ideas. The
first is the vague but powerful idea of human dignity. The second is
the more familiar idea of political equality." Thus, his argument is
that a person has a fundamental right against the government only if
that right is necessary to protect his or her dignity or standing as
one who is equally entitled to concern and respect.

AFP
Inside a government office. Corruption in India not only poses a
significant danger to the quality of governance but also threatens in
an accelerated manner the very foundations of its democracy and
statehood.

In India, corruption attacks the fundamental values of human dignity
and political equality of the people and hence there is a pressing
need to formulate a fundamental human right to corruption-free
service. The development of a fundamental human right to a corruption-
free society will be observed initially from an international
perspective so as to elevate the violation of this right to the status
of an international crime. This would provide the comparative basis to
elevate the right to corruption-free service to the status of a
fundamental right within the framework of the Indian Constitution.

One of the definitions of the term corruption is "giving something to
someone with power so that he will abuse his power and act favouring
the giver". Another definition is "the offering, giving, soliciting or
acceptance of an inducement or reward, which may influence the action
of any person". It includes bribery and extortion which involve at
least two parties, and other types of malfeasance that a public
official can commit alone, including fraud and embezzlement. The
appropriation of public assets for private use and the embezzlement of
public funds by politicians and bureaucrats have such clear and direct
adverse impact on India's economic development that their costs do not
warrant any complex economic analysis.

Corruption and its impact on governance in India

Corruption affects India at all levels of governmental decision-making
and in the distribution of state largesse. India is ranked 72nd out of
91 countries in the Corruption Perception Index, 2001, prepared by
Transparency International (TI). Corruption in India not only poses a
significant danger to the quality of governance, but also threatens in
an accelerated manner the very foundations of its democracy and
statehood. The recent revelations of corrupt practices in defence
purchases and related contracts not only tend to undermine the
security of the Indian state, but also fundamentally shake the
people's trust and belief in the Government of India and its
institutions.

The mid-1960s are perceived to be the great divide in the history of
governance administration in India. It paved the way for the blurring
of the Gandhian and Nehruvian era of principled politics and the
emergence of a new system of politics that began to tolerate and even
encourage dishonesty and corruption. The scams and scandals of the
1990s revealed that among the persons accused of corruption were
former Prime Ministers, Chief Ministers, Governors and even members of
the judiciary. India's experience with corruption has shown that laws,
rules, regulations, procedures and methods of transaction of
government business, however sound and excellent they are, cannot by
themselves ensure effective and transparent administration if the
political and administrative leadership that is entrusted with their
enforcement fails to do so and abuses its powers for personal gain
(Sunil Sondhi, 2000).

Gunnar Myrdal has described Indian society as a "soft society".
According to him, a soft society is one that does not have the
political will to enact laws that are necessary for its progress and
development and/or does not possess the political will to implement
the laws, even when made, and one where there is no discipline. He has
stressed that if there is no discipline in society, no real or
meaningful development or progress is possible. Corruption and
indiscipline survive on each other's willingness to accommodate,
tolerate and provide encouragement. Corruption affects governance in a
significant manner and it is anti-poor. For instance, a substantial
portion of foodgrains, sugar and kerosene meant for the public
distribution system (PDS) and for welfare schemes for the poor,
including the Scheduled Castes (S.C.s) and the Scheduled Tribes
(S.T.s), goes into the black market. Hardly 16 per cent of the funds
meant for the S.T.s and the S.C.s reach them (Consultation Paper on
Probity in Governance, National Commission to Review the Working of
the Constitution, 2001). The rest are misappropriated by members of
the political and official classes and unscrupulous dealers and
businessmen.

Like other social evils, the problem of corruption brings out numerous
responses. As a lawyer, my response would inevitably involve changes
in the laws and in this case an amendment to the Constitution. While I
propose this amendment, I am mindful of the inherent weaknesses of any
law or legal response if the enforcement mechanism is weak - that
would only amount to paying lip service to the law. This may be the
case with several other laws, mostly criminal laws that are already in
place to punish the corrupt, or for that matter the case of anti-
terrorism laws, which are available in plenty even as the present
government enacted the Prevention of Terrorism Act. Corruption has
flourished in India because of the drawbacks of the criminal justice
system. We see more and more examples of acquittals in corruption
cases. Several corruption-related cases filed in India in the recent
past were poorly founded upon, were backed by incomplete and
inefficient investigation, and were followed by delayed trials that
resulted in morally ill-deserved but legally inevitable acquittals.

Human right to a corruption-free society under international law

It has been argued that the struggle to promote human rights and the
campaign against corruption share a great deal of common ground. A
corrupt government that rejects both transparency and accountability
is not likely to respect human rights. Therefore, the campaign to
contain corruption and the movement to protect and promote human
rights are not disparate processes. They are inextricably linked and
interdependent and both the elimination of corruption and the
strengthening of human rights require a strong integrity system
(Laurence Cockcroft, TI Working Paper, 1998).

Having said that, it needs to be borne in mind that this generalised
system of linkage need not be applicable in all situations. Hence it
should not be presumed that the fight against corruption is synonymous
with the struggle to enforce human rights. For example, in the
Corruption Perception Index for the year 2000, Singapore was
considered to be the eighth least corrupt country. This was largely
the result of systematic anti-corruption measures initiated from the
top tier of the administration. At the same time, Singapore is hardly
known for its progressive position on human rights. On the other hand,
there is evidence to suggest that whilst the human rights situation in
Central America and many parts of Latin America and certainly India
has been improving steadily, the incidence of corruption has also been
increasing.

It may be argued that there is sufficient state practice to support a
claim for an international customary law to prohibit corruption in all
societies. That is, a case can be made for the right to a corruption-
free society as a fundamental human right; a right that should be
recognised as a component part of the right to economic self-
determination and the right to development (Ndiva Kofele-Kale, 2000).
To start with, it will be useful to examine the present international
regime and the legal framework that has been developed to fight
corruption.

An international legal regime to combat corruption

There has been a burgeoning field of law-making at both the national
and international levels on the subject of corruption. The leading
global and regional organisations spearheading this movement,
including the United Nations, the World Bank, the International
Monetary Fund (IMF), the Council of Europe, the European Union (E.U.),
the Organisation of American States (OAS), the Organisation for
Economic Co-operation and Development (OECD), the Global Coalition for
Africa (GCA), and the International Chamber of Commerce, have
articulated anti-corruption policies and strategies. The concerted
drive at the multilateral level to confront the problem of corruption
has given birth to a number of anti-corruption legal instruments,
which together constitute the current international legal regime to
combat corruption. Such enthusiastic law-making activity began with
the 1995 European Union Convention on the Protection of the European
Communities' Financial Interests and its two additional protocols.
This was followed by the 1996 Inter-American Convention Against
Corruption and the 1997 OECD Convention on Bribery of Foreign Public
Officials in International Business Transactions, and ended with the
1999 Council of Europe Criminal Law Convention on Corruption.
Ironically, while the E.U. is the flag-bearer in law-making
activities, it is worth noting that Francois Mitterrand, Helmut Kohl,
Jacques Chirac and even Tony Blair are all under the cloud of graft
allegations and inquiries. Indeed, these developments have resulted in
countries across the world focussing on corruption and making some
attempts to attack it nationally. However, these legal instruments
have not gone far enough to deal with the global problem of corruption
to the extent one would like them to. It is under these circumstances
that a fundamental human right to a corruption-free society is being
proposed, and concomitantly it is being argued that a breach of this
right is a crime under international law.

Corruption and its relevance for human rights and human development

Human rights have indeed acquired a special position in the
contemporary world because of the increasing tendency of national
governments to include these rights in their respective constitutions
as well as laws. This has resulted in several judiciaries around the
world interpreting different human rights as a part of their own
national laws or for that matter as a part of the International Law,
which their respective country has been a signatory to, through
treaties and other conventions. Thus the Universal Declaration of
Human Rights (UDHR), the International Covenant on Civil and Political
Rights (ICPR) and the International Covenant on Economic, Social and
Cultural Rights (ICESCR) have acquired greater legitimacy in the last
few decades as more and more nations have realised the importance of
these human rights as instruments for better governance. Probity in
governance is a sine qua non for an efficient system of governance and
for socio-economic development. An important requirement for ensuring
probity in governance is the absence of corruption. The other
requirements may be effective laws, rules and regulations that govern
every aspect of public life coupled with effective law enforcement and
criminal justice systems.

The right to a society free of corruption is inherently a basic human
right because the right to life, dignity, equality and other important
human rights and values depend significantly upon this right. That is,
it is a right without which these essential rights lose their meaning,
let alone be realised. As a fundamental right, the right to a
corruption-free society cannot be discarded easily "even for the good
of the greatest number, even for the greatest good of all" (Louis
Henkin, The Age of Rights, 1990). It may be argued that the right to a
corruption-free society originates and flows from the right of a
people to exercise permanent sovereignty over their natural resources
and wealth, that is, their right to economic self-determination,
recognised in the common article of the ICPR and the ICESCR (Ndiva
Kofele-Kale, 2000). Hence it may be argued that the state is in
violation of the right to economic self-determination if it transfers
in a corrupt manner the ownership of national wealth to select power-
holders who happen to be influential in a society at a particular
point of time. This violation by the state also results in a situation
where people are denied individually and collectively their right to
use freely, exploit and dispose of their national wealth in a manner
that advances their development.

The Declaration on the Right to Development, which stated
unequivocally that the right to development is a human right, was
adopted by the U.N. in 1986 by an overwhelming majority, with the
United States casting the single dissenting vote. The Declaration has
four main propositions: 1. The right to development is a human right;
2. The human right to development is a right to a particular process
of development in which all human rights and fundamental freedoms can
be fully realised, which means that the right to development combines
all the rights enshrined in both the covenants and that each of the
rights has to be exercised with freedom; 3. The meaning of exercising
these rights consistently with freedom implies free, effective, and
full participation of all the individuals concerned in decision-making
and in the implementation of the process, and therefore the process
must be transparent and accountable, and individuals must have equal
opportunity of access to the resources for development and receive a
fair distribution of the benefits of development (and income); and
finally, 4. The right confers an unequivocal obligation on duty-
holders - individuals within the community, states at the national
level, and states at the international level. Nation states have the
responsibility to help realise the process of development by
initiating appropriate development policies. Other states and
international agencies have the obligation to cooperate with the
nation states to facilitate the realisation of the process of
development. It is in this context that the fundamental right to a
corruption-free society adds a new and necessary dimension to the
right to development. No development process will have any meaning and
relevance if corruption as an institutionalised process interferes
with people's struggles to realise their right to development.

Corruption as a universally recognised international crime

Universal crimes are those crimes that a "state may participate in
their repression even though they were not committed in its territory,
were not committed by one of its nationals, or were not otherwise
within its jurisdiction to proscribe and enforce". A crime of
universal interest, that is, a crime under international law, can be
characterised as such irrespective of its designation under domestic
law (Principles of International Law Recognised in the Charter of the
Nuremberg Trial and the Judgment of the Tribunal, Principle 1, 1950).
This is what is meant by the principle of the supremacy of
international law over national law, reaffirmed in the Draft Code of
Crimes Against the Peace and Security of Mankind in Article 2.

Additionally, action taken with respect to crimes of universal
interest must come with adequate safeguards to protect the rights of
the accused; for instance, the prohibition against double jeopardy and
non-retroactivity. Where the principle of double jeopardy seeks to
safeguard the accused from arbitrary judicial treatment under the
criminal justice system, the doctrine of retroactivity seeks to uphold
the fundamental objective of criminal law, which is to prohibit and
punish and to deter the conduct of what is considered sufficiently
serious in nature to justify characterisation as a crime. An
international crime must satisfy the principle of aut dedere aut
judicare, which places any state in whose territory the alleged
accused is present under an obligation to extradite or prosecute him
or her. The basic purpose of this principle, which is found in all
anti-bribery conventions, is "to ensure that individuals who are
responsible for particularly serious crimes are brought to justice by
providing for the effective prosecution and punishment of such
individuals by a competent jurisdiction".

But the question remains as to whether the term corruption as used in
this article meets the exacting standards of an international crime as
laid down in the Nuremberg Charter and the Draft Code of Crimes, which
entails individual responsibility. Under the Draft Code of Crimes, a
prohibited conduct qualifies as a crime if it is of such a character
as to threaten international peace and security. That is, it must be
seen as a crime of exceptional gravity or extraordinary magnitude and
of sufficient seriousness to justify the concern of the international
community (Ndiva Kofele-Kale, 2000). The plethora of efforts made by
international institutions at various levels to curb corruption prove
that there is a consensus all over the world that in the developing
countries corruption hinders economic growth and scuttles development
in a direct and tangible manner. At the most, it may be argued that
there is a lack of political will to engage, and suggest innovative
and effective solutions to attack, the problem of corruption so that
changes are seen in the not-so-distant future.

It may be useful to refer to the fact that corruption has long been
prohibited by the laws and constitutions of most states - in the old
democracies of Western Europe and North America, the new democracies
of Central and Eastern Europe, Asia, and Africa. Interestingly, it is
expressly prohibited in the constitutions of Haiti, Nigeria, Paraguay,
Peru, the Philippines and Sierra Leone, to mention a few. The gravity
of the problem may be understood by examining the work of various
special tribunals and commissions of inquiry that have been set up in
several countries to probe into and try cases of corruption by public
officials. These developments worldwide undoubtedly provide enough
arguments for the international community to develop a consensus to
treat corruption as a crime punishable under international law.

C. Raj Kumar is a visiting research fellow at the Faculty of Law,
Meiji Gakuin University, Tokyo. He has been a Rhodes Scholar at the
University of Oxford and a Landon H. Gammon Fellow at the Harvard Law
School.

Volume 19 - Issue 19, September 14 - 27, 2002
India's National Magazine
from the publishers of THE HINDU

http://www.hinduonnet.com/fline/fl1919/19190780.htm

ESSAY

Corruption and human rights - II

C. RAJ KUMAR

The constitutional quest to develop human rights against corruption
goes beyond demanding that the government respect the rule of law.

The concluding part of a two-part article.

THE pronouncements of various states in recent years give enough
evidence to show that there is universal condemnation of corrupt
practices by public officials and a general interest in cooperating to
suppress them. The parties to the Criminal Law Convention expressly
acknowledge that "corruption threatens the rule of law, democracy and
human rights, undermines governance, fairness and social justice,
distorts competition, hinders economic growth and endangers the
stability of democratic institutions and moral foundations of
society" (Council of Europe, Preamble to the Criminal Law Convention
on Corruption, 2000). In the 1994 Summit of the Americas Declaration
of Principles and Plan of Action, the heads of state of 34 nations of
the southern hemisphere linked the survival of democracy to the
eradication of corruption. "Effective democracy," they declared,
"requires a comprehensive attack on corruption as a factor of social
disintegration and distortion of the economic system that undermines
the legitimacy of political institutions".

On December 16, 1996, the United Nations General Assembly acting on a
recommendation of the Economic and Social Commission, adopted the U.N.
Declaration against Corruption and Bribery in International Commercial
Transactions. The declaration highlights the economic cost of
corruption and bribery and points out that a stable and transparent
environment for international commercial transaction is essential in
all countries for the mobilisation of investment, finance, technology,
skills and other resources across national borders. In the
declaration, member-states pledged to make the bribing of foreign
public officials a criminal offence in an effective and coordinated
manner, and to deny tax deductibility on bribes paid by any private or
public corporation or individual of one member-state to any public
official or elected representative of another country.

M. LAKSHMAN

The Supreme Court of India. In the Indian context, corruption distorts
the principle of equality before the law and equal protection of the
law, which is enshrined in the Constitution.

Corruption was also the subject of a 1997 U.N. General Assembly
Resolution entitled Action Against Corruption. The resolution
underscored the General Assembly's concern about the serious problems
posed by corrupt practices to the stability and security of societies,
the values of democracy and morality, and to social, economic and
political development. Professor Ndiva Kofele-Kale has argued that an
emerging customary law norm that treats corruption as a crime under
international law draws strong support from the following: 1.
Consistent, widespread and representative state practice proscribing
and criminalising corruption; 2. The widespread condemnation of acts
of corruption as reflected in the preambles of multilateral anti-
corruption treaties and in declarations and resolutions of
international organisations; 3. Pronouncements by states in recent
years that evidence a universal condemnation of corrupt practices by
public officials; 4. A general interest in cooperating to suppress
acts of corruption; and 5. The writings of noted publicists
recognising corruption as a component of international economic
crimes. Based on these factors, he has argued that there is a strong
case for treating corruption as a crime under international law with
individual responsibility and punishment attached to it.

As much as I agree with Prof. Kale on the fundamental thesis of
recognising corruption as an international crime and thereby
suggesting the development of a fundamental human right to a
corruption-free society, I would like the development of this human
right to be observed within the context of the states' constitutions.
Thus, it is desirable that the constitutions of nation states have
express provisions to recognise the fundamental human right either to
a corruption-free society or to corruption-free service, which would
enable national judiciaries to play a catalytic role in enforcing
these rights. This proposal may be seen in the context of developing
constitutional and legislative measures, which are necessary to ensure
probity in governance in nation states. Thus, the question of the
constitutionalisation of the right to corruption-free service with
specific reference to India would be examined within the framework of
protecting and promoting human rights and better governance.

Towards recognising a fundamental right to corruption-free service

As early as 1964, the Santhanam Committee, which was set up to examine
the increasing menace of corruption in the administration, observed
that the "tendency to subvert integrity in the public services instead
of being isolated... is growing into an organised, well-planned
racket". If anything, it has grown much larger and become even better
organised since this report was prepared. Granville Austin has said
that the Indian Constitution is first and foremost a social document.
Thus, when those who drafted the Constitution included the chapters on
fundamental rights and directive principles of state policy, they
hoped and expected that these would give strength to the pursuit of
the social revolution in India. Fundamental rights of the Constitution
are in general those rights of citizens, or those negative obligations
of the state not to encroach on individual liberty.

Although the fundamental rights primarily protect individuals and
minority groups from capricious, prejudicial, state action, three of
the articles are designed to protect the individual against the
actions of other private citizens. Article 17 abolishes
untouchability; Article 15(2) lays down that no citizen shall suffer
any disability in the use of shops, restaurants, wells, roads and
other public places on account of his religion, race, caste, sex or
place of birth; Article 23 prohibits forced labour, which, although it
had been practised by the state, was more commonly a case of landowner
versus peasant struggle.

Thus the state, in addition to obeying the Constitution's (negative)
injunctions against interfering with certain of the citizen's
liberties, must fulfil its positive obligation to protect the
citizen's rights from encroachment by society (Granville Austin,
1966). It is this negative injunction and positive obligation within
the scheme of fundamental rights that needs to be built upon while
evaluating the impact of corruption on governance administration in
India. In India, corruption has scuttled the realisation of
fundamental rights, discouraged any scope for the development of
egalitarianism, and thereby significantly hindered the process of
achieving a social revolution. This has resulted in liberty becoming
the privilege of a few who happen to hold economic, bureaucratic,
judicial or political power. "The struggle for career advancement,"
said former Secretary to the Government of India R.C. Dutt, "is
greatly influenced by the surrounding moral atmosphere of the struggle
for existence of different classes and groups in society...(This) has
provided ample opportunities for corruption, and indeed for collective
self-aggrandisement at the expense of the poor". P.N. Haksar thought
"our civil services... are committed first of all to themselves and
their nuclear family...(and beyond this to) making secure the future
of our sons, daughters...and if possible... the members of our sub-
caste, caste, community and region".

The concept of identifying corruption as a cause and an effect of poor
governance and the resultant violation of human rights is a recent
phenomenon. Its massive impact on the legitimacy of all institutions
in India needs to be examined thoroughly. This observation rests on
the argument that when the government of a country fails or neglects
to curb or contain corruption, that government fails to fulfil its
obligation to promote and protect fundamental human rights in the
country. Nihal Jayawickrama, executive director of Transparency
International ("Corruption - A Violator of Human Rights", 1998),
argues that the three important ways by which corruption affects human
rights are: 1. Corruption perpetuates discrimination; 2. Corruption
prevents full realisation of economic, social and cultural rights; and
3. Corruption leads to the infringement of several civil and political
rights.

I may add that in the Indian context corruption distorts the principle
of equality before the law and equal protection of law, which is
enshrined in the Constitution. It is clearly understood both from a
legal and constitutional interpretation and from the plethora of
judicial decisions in India that the principle of equality and non-
arbitrariness is the "brooding omnipresence" (Justice P.N. Bhagwati in
Maneka Gandhi vs Union of India) of the Indian Constitution.
Corruption not only perpetrates injustice, resulting in the breakdown
of the governance machinery, but also violates the fundamental rights
that are guaranteed to citizens. Conversely, it may be argued that the
present proposal to include the right to corruption-free service as a
part of the scheme of fundamental rights might strengthen the other
rights, including the right to equality and the freedoms that are
enshrined in other portions of Chapters III and IV of the
Constitution.

Interestingly, Article 11(2) of the Constitution of Eritrea provides
that "all administrative institutions shall be free from corruption,
discrimination and delay in the delivery of efficient and equitable
public services". Even though this provision hardly guarantees a
fundamental right to corruption-free service, the fact that
"corruption" in administration has been constitutionally proscribed
sets the right tone for the corruption discourse. However, developing
countries like India need to think hard as to how to tackle corruption
legally and, in this case, constitutionally. The Indian judiciary has
progressively developed and expanded the scope of fundamental rights
to include a plethora of rights, mostly, within the ambit of the
"right to life" provision in Article 21 of the Constitution. A classic
case in point is the initial judicial recognition of a fundamental
right to education, through a creative interpretation that the right
to life includes the right to education. It brought home the most
valuable argument that life without education indeed amounts to
vegetative existence.

The role the Indian judiciary has played in expanding the 'right to
life' concept to include numerous economic and social rights, which
were hitherto considered merely policy guidelines in the form of the
directive principles of state policy, is amazing. The judiciary was
able to justify all the rights that we claim today to be part and
parcel of fundamental rights. It has resulted in the legislature
bringing a constitutional amendment making the right to education a
fundamental right.

But when it comes to corruption, the judiciary in India has not been
able to develop in clear terms any fundamental right to corruption-
free service for the citizens. Article 14 of the Constitution
guarantees equality before the law and equal protection of laws to all
Indian citizens. Further, it may be argued that corruption directly
violates the protection guaranteed under the equality clause, because
a corrupt public servant discriminates against a person who does not
bribe him as opposed to a person who bribes him. This isolated
incident of discrimination gets institutionalised into an all-
pervasive phenomenon, thereby violating the equality clause.
Similarly, Article 19 gives Indian citizens the fundamental right to
practise any business or profession. In India, public servants who
hold positions of power and authority use their discretion to grant or
deny permission to start business enterprises. The corrupt public
servant often justifies such action by arguing (to himself) that he
has the right to a share in the profit of the professional or the
businessperson (N. Vittal, Central Vigilance Commissioner of India,
2000). Thus, the equality clause in Article 14 and the freedoms
provided in Article 19 lose their meaning and relevance owing to the
institutionalisation of corruption at every level of the citizens'
interaction with the government.

There is an urgent need for a constitutional reform in the form of an
amendment to the Constitution to include the fundamental right to
corruption-free service. This is not to suggest that the mere
inclusion of a fundamental right would result in an immediate success
in the struggle to prevent corruption; it would, however, be a
significant step in the right direction. It would open up several
avenues for lawyers, judges, non-governmental organisations and
parliamentarians to mobilise public opinion on the subject. The
importance of the subject should not be underestimated as all our
goals, ideals and aspirations of constitutional democracy rests on the
legitimacy of the state as an institution to deliver the goods. The
kind of corruption that is prevalent in India and other developing
countries fundamentally threatens this structure. One hopes that the
legislature will take the lead in this matter. I guess we are not far
from the day when the Supreme Court of India would read Articles 14
(equality), 19 (freedoms) and even 21 (life) coupled with the
directive principles of state policy that relate to good governance
and sound public administration and conclude that Indian citizens
indeed have a fundamental right to corruption-free service.

This is not to suggest that the lawmakers should actually wait to
bring a constitutional amendment so as to include corruption-free
service as a fundamental right. But experience has shown that in the
area of law reform in India, the judiciary has indeed taken the lead.
By way of constructive judgments, it has instructed as to what the law
is or rather what the law ought to be. The parliamentarians have
followed it up after adequate pressure from the civil society and the
populace. Vittal supports the view that corruption-free service should
be made a fundamental right by including such a provision in the
Indian Constitution. His arguments are based on the fact that
corruption-free service must become a fundamental right of every
citizen in India, as that is a basic necessity for good governance. He
supports the view of the United Nations Development Programme (UNDP)
that good governance is indeed a universal human right and that the
right to good governance should be part of fundamental rights.

Thus, the inclusion of the right to corruption-free service as a
fundamental right would result in not only our recognising that
corruption affects good governance, but also delineating the principle
that the citizenry have a right to demand governance without
corruption and if it is not given to them, they will be able to
approach a court of law through the use of writ jurisdiction.

The possible objections to the inclusion of such a right would mostly
come from those who are against the judiciary taking up the role of
governance in India. It is worth noting that in so many ways the right
to corruption-free service in so many ways is not very different from
other fundamental rights that the judiciary has evolved through
creative and progressive interpretation.

Subodh Mohite, Member of Lok Sabha, introduced a private ` Bill in the
winter session of Parliament in 2000 for the inclusion of a new
Article 17A in the fundamental rights chapter by which the citizen
will be entitled to get corruption-free service from the state. It is
anybody's guess as to what happened to the proposal. I would have
liked the National Commission to Review the Working of the
Constitution, which recently submitted a good report, to have proposed
such an inclusion in the chapter on fundamental rights. Despite the
recommendations of the Commission to deepen and expand the scope of
fundamental rights within the Constitution, I am of the view that
corruption-free service ought to have been made a fundamental right,
and this would have added practical meaning and increased the
relevance of the recommendations.

Thus, the constitutional quest to develop human rights against
corruption goes beyond demanding that the government respect the rule
of law. Even where the rule of law may be respected, the
humanitarianism of human rights under the Indian Constitution cannot
fall short of a tireless search to increase the level of
constitutional protection beyond the negative requirement of
disciplining the state to achieve equality, promote egalitarianism and
uphold dignity. The fundamental human right to corruption-free service
would be justified even within the Dworkinian scheme of taking rights
seriously, if we are able to develop a theoretical argument that
corruption affects equality and dignity. And hence the right to
corruption-free service is part of the human rights jurisprudence that
struggles to protect the dignity of Indians, who are entitled to equal
treatment, concern and respect.

C. Raj Kumar, Lecturer at the School of Law, City University of Hong
Kong, was a Rhodes Scholar at the University of Oxford and a Landon H.
Gammon Fellow at the Harvard Law School..

Volume 19 - Issue 20, October 12 - 25, 2002
India's National Magazine
from the publishers of THE HINDU

http://www.hinduonnet.com/fline/fl1920/stories/20021011008607500.htm

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Feb 22, 2010, 7:54:49 AM2/22/10
to
How to cure society of corruption
Staff Reporter

Actor Revathy launches the ‘Students Against Corruption’ wing of Fifth
Pillar

— Photo: R. Shivaji Rao

BACKING UP: Actor Revathy extending support to the Fifth Pillar’s
campaign against corruption by signing on a banner at a function
organised by the NGO in Chennai on Friday. Director Vasanth is in the
picture.

CHENNAI: Non-governmental organisation Fifth Pillar has brought out
‘Lanjathai Ozhipadhu Eppadi’ (How to Eradicate Corruption), a book in
Tamil authored by Senthamizh Saravanan, at a function here on Friday.

Fifth Pillar’s president Vijay Anand said the organisation was
involved in creating awareness among the people about their
constitutional rights.

A campaign on ‘Freedom From Corruption’ was also conducted across the
State to reach out to the society, particularly students, about the
maladies of corruption. The book would help in carrying forward the
mission.

Tamil Nadu Social Welfare Board chairperson Salma released the book
and chairman of the Madurai-based Meenakshi Medical Mission Hospital
N. Sethuraman received the first copy. On the occasion, students from
various city colleges were administered a pledge against selling their
votes.

Actor and director Revathy launched the ‘Students Against Corruption’
wing of Fifth Pillar.

Director Vasanth was among the other participants. A light music
concert by Srilekha Parthasarathy and M.J.Shriram was also conducted
as a fundraiser event.

Online edition of India's National Newspaper
Saturday, Mar 14, 2009
ePaper | Mobile/PDA Version

http://www.hinduonnet.com/2009/03/14/stories/2009031458290200.htm

Front Page

Criminalisation and corruption hurt electoral system, says K.K.
Venugopal
Special Correspondent

“Get the state to fund the bulk of election expenses; use negative
vote forcefully”

— Photo: K. Pichumani

K.K. Venugopal, senior advocate, Supreme Court, delivers the Fourth
Rajaji Memorial Lecture on ‘Redemocratisation of the electoral system’
in Chennai on Saturday.

CHENNAI: Criminalisation of politics and corruption undermine the
democratic principles of the electoral system, K.K. Venugopal, senior
advocate, Supreme Court, said on Saturday. He made suggestions for
neutralising these negative aspects, to redemocratise the electoral
system.

Delivering the Fourth Rajaji Memorial Lecture organised by the
Triplicane Cultural Academy and the Kasturi Srinivasan Library here,
Mr. Venugopal said that on the threshold of the elections to the 15th
Lok Sabha, political parties were vying with one another, at the cost
of the model code of conduct, to win votes.

Talking on ‘Redemocratisation of the electoral system,’ Mr. Venugopal
first focussed on criminalisation of politics — the tendency of
parties to rely on gangsters, history sheeters and goondas and their
muscle power to win elections. Internet data revealed that as many as
93 members of Parliament had criminal charges pending against them.

Disqualification

Mr. Venugopal said Section 8 of the Representation of the People Act
talked of disqualification of the contestant on conviction and
sentencing for not less than two years. Also, any person who had been
declared guilty under special laws by a court of law would be
disqualified irrespective of the number of years of conviction. The
principle behind the move to protect a candidate from disqualification
was the presumption of innocence. But it would be incorrect to apply
this principle in a “wooden fashion” without taking into account the
damage that might be caused to the democratic process.

Mr. Venugopal urged the Election Commission not to discriminate
between taking action against a candidate with criminal charges
pending against him or her and action against sitting MPs or MLAs
facing criminal charges. Mr. Venugopal’s suggestion to prevent
corruption and regulate expenditure by candidates was to get the state
to fund the bulk of the election expenses. A corpus fund could be set
up and corporates willing to donate could pool their money into this
general fund. This could then be disbursed to relieve political
parties and candidates of part of the expenses. The Supreme Court
advocate also proposed that the negative vote or expression of no
confidence against every one of the contestants be used forcefully. In
addition to the names of the candidates, the machine should carry a
button with the legend “None of the Above” for the benefit of those
who wanted to cast the negative vote. If, in any constituency, the
negative votes exceeded the number of votes secured by the successful
candidate, then the election should be declared null and void, Mr.
Venugopal explained.

The former Chief Election Commissioner, T.S. Krishnamurthy, commenting
on by-elections, said if a vacancy arose during the first half of the
tenure of the House, the Election Commission should consider
conducting a by-election. If it arose during the second half, the
party must be asked to nominate a candidate to take the place or the
person who secured the second place should take charge.

N. Ram, Editor-in-Chief of The Hindu, who chaired the session, said
the electoral system of the country was extremely complex, involving
over 700 million eligible voters. There were debates on the lengthy
process involved, the massive requirement of resources, including
security forces, and the huge costs that made contesting polls nearly
prohibitive for the aspirants, he said.

G. Narayanaswamy, president, Triplicane Cultural Academy, and V.
Murali, vice-president, spoke.

Online edition of India's National Newspaper
Sunday, Apr 05, 2009
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http://www.hinduonnet.com/thehindu/2009/04/05/stories/2009040559111000.htm

Front Page

CBI unearths corruption, forgery in Protectorate of Emigrants,
Chennai
Vinay Kumar

NEW DELHI: The Central Bureau of Investigation unearthed a well-
organised racket of corruption, forgery and bribery in the office of
the Protector of Emigrants (POE), Chennai, last month. Since 2006, it
has registered cases of organised corruption by officials of the POE
in Thiruvananthapuram, Hyderabad, Mumbai and Chandigarh.

Senior CBI officials told The Hindu on Friday that in almost all the
cases, emigration clearance was given on the basis of forged and
fabricated documents. The then CBI Director, P.C. Sharma, brought this
up, in a December 12, 2002 letter to the Secretary, Ministry of
Labour.

Last month, the CBI registered a case against R. Sekar, Protector of
Emigrants, Chennai, and two others — chairman of a Chennai-based trust
D. Ravindra Babu and a service agent for emigration Anwar Hussain —
under various Sections of the Prevention of Corruption Act, 1988, and
Section 120-B for alleged criminal conspiracy.

The POE again hit the headlines when its Delhi chief J. N. Panda
committed suicide in his native place in Orissa after gunning down his
family members.

The CBI searched the houses and offices of the POE, the service agent
for emigration and other staff members in Chennai and seized Rs. 2.03
crore in cash and documents.

The probe revealed that on average, 300 emigration clearances were
being issued by the POE, Chennai, every day, and the bribe amounted to
Rs. 3 lakh. The bribe was not directly collected by the POE and his
officials from candidates or agents, but passed on through select
recruiting agents. The accounts of bribe to be paid a month for the
total number of clearances made by the POE were maintained by a couple
of recruiting agents to whom other agents were asked to make
payments.

For the POE officials in Delhi and other places, the bribe ranging
from Rs. 2 lakh to Rs. 3 lakh a month was sent to their native places
through domestic hawala channels, CBI sources said. The amount,
collected by the POE, Chennai, alone amounted to Rs. 8.5 crore in the
past one-and-a-half years. The CBI seized cash and documents
pertaining to movable and immovable property of the accused to the
tune of Rs. 4.3 crore.

Established to protect the interests of emigrant labour, the POE
processes applications from workers seeking employment in West Asian
countries. A change in the policy, effected three or four years ago,
stipulated that certain documents from the employer are a must for
emigration clearance. The aim is to make sure that the workers are not
cheated by recruitment agencies.

The CBI sources said that hardly any employer in Saudi Arabia or Gulf
countries ever furnished such documents, and recruitment agents took
recourse to forgery. Interestingly, more than 100 fake stamps were
recovered during searches in Chennai. Similarly, evidence of large-
scale “forgery industry” came to light during the investigation of the
cases registered in Hyderabad, Chandigarh and Thiruvananthapuram.
Hardly any applicant ever got any original document from the
employers, the sources said.

Senior CBI officials said innocent labourers seeking employment abroad
were left with no option but to submit forged documents. “All this is
common knowledge among POE officials who demand bribes for emigration
clearance on the basis of forged documents.”

Online edition of India's National Newspaper
Sunday, Aug 23, 2009
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http://www.hinduonnet.com/2009/08/23/stories/2009082360450900.htm

Andhra Pradesh

Samal report on corruption: walkout by TDP, BJP
Special Correspondent

VC post will be filled shortly, says Higher Education Minister

TDP leader demands action against those mentioned in report

HYDERABAD: The issue of alleged corruption in higher echelons of the
State administration involving IAS officers and some Ministers
referred in R. C. Samal’s report rocked the Assembly on Wednesday,
leading to a protest walkout by Telugu Desam and BJP members.

Raising the issue, N. Janardhan Reddy (Telugu Desam) wanted to know
why the Vigilance Commissioner (VC) post was not filled after
retirement of R. C. Samal five months ago, and demanded action against
those mentioned in his report.

Deputising for the Chief Minister, Higher Education Minister D.
Srinivas replied that the post of Vigilance Commissioner would be
filled shortly and action, if any, on Samal report would be taken once
the committee headed by the Chief Secretary submitted its views. Mr
Samal did not submit any report while in office and instead, released
a “monograph” to the press after his retirement citing some officers
and Ministers as corrupt. A privilege motion moved against Mr Samal by
some MLAs was pending disposal, he added.

The Minister said though the document lacked official sanctity, the
Government had taken serious note of Mr. Samal’s charges. “We too want
the administration clean.”

Advisory in nature

Mr. Srinivas said the post of Vigilance Commissioner was advisory in
nature and created primarily to ensure uniform punishment to the
officers and employees of different departments found corrupt. The
Government could differ with the Commissioner’s recommendations and
had actually done so in 75 cases. However, there was no interference
from the Government or the Chief Minister at any stage in the VC’s
functioning.

Online edition of India's National Newspaper
Thursday, Mar 06, 2008
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Corruption revisited
Ranabir Ray Choudhury

ON FRIDAY last, the chairman of the National Commission to Review the
Working of the Constitution released three more ``sets of papers''
relating to ``probity in governance, a Constitutional mechanism for
the settlement of inter-State disputes, and funda mental duties of
citizens''. While releasing the papers, the chairman, Mr Justice
(Retd) M. N. Venkatachalaiah, said he wanted to know from the public
``whether corruption-free governance should be made a Fundamental
Right or a Directive Principle of Sta te Policy by suitably amending
the Constitution''.

This is, of course, a very appropriate question to ask the immediate
inference being that India still does not have a society the
corruption content of which is acceptable -- at least to Mr
Venkatachalaiah's Commission if not to others. Given the exte nt of
the corruption to which every citizen of the land -- irrespective of
his or her status -- has to indulge in willy-nilly to get things done
(in every sphere of activity), there is simply no room to challenge
the inference. At the same t ime, there is a second, equally-
significant, inference, namely, that Indian governance since 1947 has
not been able to do anything to control the menace of corruption. On
the contrary, the cancer has spread at an exponential rate
underscoring, among other things, the total ineffectiveness of the
various Governments at the Centre and the States of the Union in
tackling the scourge.

It is against this general background that Mr Venkatachalaiah's query
to the citizens of the country should be seen, the specific point of
interest being whether, in the light of the experience during the past
54 years, the ``working of the Constitution' ' will be improved in any
way by including ``corruption-free governance'' in the Fundamental
Rights or in the Directive Principles.

Frankly speaking, as far as this correspondent can divine, no
practical purpose will be served by amending the chapter on
Fundamental Rights or the Directive Principles in this specific
direction. To take the first point, inclusion of ``corruption-free g
overnance'' in the list of Fundamental Rights will certainly invest
the fight against corruption with a special aura and respectability in
the Constitutional scheme of things, which, admittedly, is good as far
as it goes the problem being that it does no t go far enough to effect
a change for the better as far as the ground reality is concerned.
Certainly, the citizen will be able to flaunt one more Fundamental
Right (which has a value of its own), but at the level of actual
practice the only thing he wi ll be enabled to do after the change is
to approach the courts on the specific ground that his Fundamental
Right to ``corruption-free governance'' has been violated (which he
could not do earlier).

The basic point is: Will the addition of this particular type of
action in the courts aid in any practicable way the fight against
corruption? Even without their inclusion in the Fundamental Rights,
issues of corruption in various forms and in various wa lks of life
have been the subject matter of legal suits. The question is: Will the
addition of one more ground for instituting a legal suit aid the cause
of a corruption-free society in any meaningful way, or will it merely
lead to an increase in the alr eady-heavy burden on the legal system?

The second point relates to the inclusion of ``corruption-free
governance'' in the Directive Principles of State Policy. At one
level, as mentioned earlier, it is rather unfortunate that the
suggestion should at all have been made because the inference i s that
till now ``corruption-free governance'' has not been accorded the
importance due to it in the Constitutional scheme of things perhaps
because, among other things, it has never been an explicit objective
of the implementation of the Indian Constitu tion. The point is: Is
such an ``explicit'' undertaking at all required because the very
basis of corrupt behaviour in the wide sphere of governance is the
ingrained belief (borne out by the success of long experience) that
one can jump the gun (norms, r egulations, etc) as it were by using
the weapon of offering undue favours to the dispensing authority,
whose every activity in an official capacity is based on the rule of
law.

At another level, the suggestion to include ``corruption-free
governance'' in the Directive Principles suggests that there is some
hope of the objective being attained if the State is persuaded to
devote more attention to the subject because of its amend ed
Constitutional status. Article 37 (in the section on Directive
Principles) says: ``The provisions contained in this Part shall not be
enforceable by any court, but the principles therein laid down are
nevertheless fundamental in the governance of the country and it shall
be the duty of the State to apply these principles in making laws''.

There are two suggestions that need to be made here. First, there is
no reason to believe that what has always been implicit in the Indian
Constitutional scheme of things, and has not been followed either in
letter or spirit under that dispensation, will suddenly begin to
attract a different response from society at large just by virtue of
the fact that the Constitution says explicitly that it is ``the duty
of the State to apply these (the Directive) principles in making
laws''.

Secondly, going by the experience of certain other Directive
Principles, which are yet to produce results as envisioned by the
Founding Fathers of the Constitution, there is no reason to believe
that ``corruption-free governance'' will become a reality i n the
decades ahead just because of its inclusion in the list.

Briefly, therefore, it does not seem that either of the two
possibilities mentioned by Mr Venkatachalaiah will be able to reduce
corruption in the governance of India. What then is to be done to curb
the menace, which is slowly but steadily taking its to ll of the large
majority of the citizens of this country? Surprisingly, the answer
seems to be a very simple one, namely, conversion of the Indian State
from being a ``soft'' one to a ``hard'' State in the sense depicted by
Gunnar Myrdal years ago. But t he problem is: How does one go about it
in the given Indian Constitutional context? More specifically, how
does one convince the nation's legislators to make existing laws more
stringent when dealing with the corrupt?

Frankly, the outlook appears to be bleak because the existing mindset
of Indian politicians is simply not up to the mark to deal with the
growing crisis. Clearly, Mr Venkatachalaiah has a tough task on his
hands and, although one wishes him well in his e fforts to review the
working of the Constitution, it does not seem likely that he will be
successful as far as the corruption issue is concerned. The problem
does not lie between the covers of a document but in the mind and
heart of the people, specially those who pulling the strings of
power.

Financial Daily
from THE HINDU group of publications
Monday, July 09, 2001

http://www.hinduonnet.com/businessline/2001/07/09/stories/040920ju.htm

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Feb 22, 2010, 8:14:41 AM2/22/10
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Sukna scam: Lt Gen Prakash gets interim relief
ANI

Posted: Monday , Feb 22, 2010 at 1449 hrs

New Delhi:
The court granted permission to Lt. General Prakash to cross-examine
witnesses who earlier gave statement against him.

Lt Gen Avadesh Prakash on Monday got relief from the Armed Forces
Tribunal (AFT), which quashed the Court of Inquiry (COI) proceedings
against him in the Sukna land scam and ordered a de novo probe into
it.

Pronouncing the verdict, a two-member AFT Bench headed by Justice A K
Mathur allowed Prakash, who had retired from the Army last month, to
cross examine six witnesses who had deposed against him in the COI
without being cross-examined.

Observing that the Army Rule 180 was ‘seriously violated’ during the
COI, it said, “We fail to understand the manner in which the COI has
been conducted. This was not a substantial compliance of the
principles of natural justice.” The Rule lays down that all officers
have the right to be present when some other personnel depose against
them during a COI. After today’s order, court martial proceedings
against the former Military Secretary will have to wait till the fresh
COI is over.

The Tribunal said after submitting fresh findings regarding Prakash's
role in the case, “the authorities will be free to decide the fate of
the case whether or not to send it for court martial.” The court
martial proceedings, which had been ordered against Prakash, were to
start on February 25 in Kolkata.

The issue of cross-examination of the six witnesses was a major plea
of the retired general against the COI, on the basis of which the
disciplinary action was initiated. The six witnesses to be cross-
examined by Prakash include Lt Gen P K Rath, Lt Gen Ramesh Halgali,
Maj Gen P C Sen, Col N K Dabas, Lt Col Jiji Verghese and Naib Subedar
Surjit Singh.

Justice Mathur said in order to meet the principles of natural
justice, “we permit Prakash to cross-examine the (six) witnesses.” The
AFT rejected Prakash's plea to cross-examine S Bajoria, owner of the
controversial 71-acre land adjacent to Sukna Military Station, as he
had earlier refused to do so when he was given the opportunity during
the COI.

Welcoming the decision of the tribunal, Prakash's counsel Jyoti Singh
said now her client will have a chance to cross examine the witnesses
in the fresh COI. “General Prakash has got justice today. The COI has
been set aside because of non-compliance of the Army Rule 180. The
court has set aside that part of the COI and held that all those
witnesses will now be recalled and they will be examined in Prakash's
presence. The COI, depending on the fresh evidence, will now submit
fresh findings”, she said. Prakash was personally not present in the
court.

In his petition filed earlier this month, Prakash had asked the AFT to
quash the COI and his court martial claiming that Army Rule 180 was
violated during the course of the COI. The court also directed the
Army to give the depositions of all the six witnesses to Prakash 15
days in advance so that he can cross-examine them during the COI.

The court also rejected Prakash's plea that the COI was not convened
as per the Army Rules as the presiding officer was junior to him.
Justice Mathur said, “It is irrelevant that whether Lt Gen Parnaik was
junior to the petitioner, that doesn't make any difference. But, he is
not lower in rank to the petitioner. The Regulation 518 (of the Army
Rules) has been substantially complied with.”As per the Army Rules,
the presiding officer should be, wherever possible, senior or at least
of equivalent rank of the officers facing the trial.

Prakash was indicted by an Army COI for his alleged role in issuing of
'No-objection Certificate' to a private realtor Dilip Agarwal for
building an educational institute at a 71-acre piece of land adjacent
to the Sukna military station in West Bengal.

Prakash along with Lt Gen P K Rath was facing a court martial in the
case. Two other generals Lt Gen Ramesh Halgali and Major Gen P C Sen
are facing administrative action for their alleged roles in the case.

Comments (1) |

Bias
By: Shirish Chaudhry | 22-Feb-2010

With due regards to this newspaper, it must be said that you have gone
hammer & tongs against this one officer. You had almost declared him
worthy of losing his pension! To the neutral observers, this COI
always looked like a kangaroo court where Lt Gen Prakash had been pre-
judged. So much media pressure was created that AK Antony felt safer
advising Army Chief to order court martial, completely ignoring the
obvious anamolies which have been now upheld by the tribunal. The
intensity of bias IE had, surprised even the hardened fans of yours
for ages (like me). I am confident you will now let fresh trial take
place without creating pressure.

http://www.indianexpress.com/news/sukna-scam-lt-gen-prakash-gets-interim-relief/582855/0

Sukhna Land scam: Army Chief calls for administrative action
ANI

Posted: Tuesday , Jan 12, 2010 at 1029 hrs

New Delhi:
Army General wants strict action against those involved in the Sukhna
Land scam.

Army Chief General Deepak Kapoor on Monday evening recommended to
initiate administrative action against Military Secretary and other
senior Generals who were indicted by the Court of Inquiry (COI) in the
Sukhna Army Land Scam, said sources.

Military Secretary Lt Gen Avadesh Prakash was to retire from the
service on January 31. The Defence Ministry will initiate action
according to the Army Act.

Prakash was one of the eight principal staff officers (PSOs) at the
Army Headquarters who acts as an advisor to the Army Chief.

Earlier, in December 2009, the Eastern Army Command chief, Lt. Gen.
V.K. Singh, had recommended a summary dismissal for Prakash.

The report also recommended initiating proceedings against Lt. Gen.
P.K. Rath, whose appointment as deputy chief of army staff has been
scrapped by the Defence Ministry.

It was reportedly learnt that General Kapoor’s action came after
coming under severe pressure by the Defence Minister A K Antony.

The proceedings of the Court Martial will also be initiated against
Lt. Gen P K Rath, and Maj. Gen P C Sen, who were also allegedly
indicted by the CoI report.

According to top Defence Ministry Sources, “Army has been always forth
coming in taking action against any wrong-doing in the services and
Army Chief has recommended action against Generals implicated by Court
of Inquiry.”

Earlier also, Gen Kapoor earlier stated that tough actions would be
initiated against any wrongdoings in the Army.

22 Comments |

Induct Institutional Pride and Mantain Financial Rewards
By: Lt. Pratap Singh | Friday , 29 Jan '10 17:00:08 PM

Motivation - both financial and moral - is the key to excellence in
every profession. Lets ensure it. The wise men know how.

Punish Them.
By: Dinesh | Thursday , 14 Jan '10 16:20:56 PM

Every " TAINTED " Officers in land scam should be given Death Penalty
by firing squad, including Officials & Political bosses who " SHIELD "
them. Army Batalions would be like " WAR LORDS " of Talibaan if
Principle and Discipline not maintained, and Corruption not
controlled.

Much ado about nothing.
By: Pradeep Desai | Thursday , 14 Jan '10 12:52:58 PM

If not an inch of army land was sold, and even the NOC was later
withdrawn, why was the CoI held at all ? There is something very fishy
about this ! We must not forget that these officers have put in close
to forty years of service to the nation, one must look at the complete
picture before deciding on any punishment, as this appears to be much
ado about nothing.

SUKNA LAND SCAM
By: Kanwar | Wednesday , 13 Jan '10 18:30:33 PM

Why do we forget what is taught to us in NDA,IMA ,DSSC and other
establishments .Where was the need to issue NOC .There must be some
personal interest involved when the norms were violated .

The symptom is of a rot which has set in
By: Brigadier (retd) Sarvesh Dutt Dangwal | Wednesday , 13 Jan '10
11:44:05 AM

Lt gen avdhesh prakash succumbed to an inducement.lt gen p k rath &
halligali lacked the moral courage to stand up against a wrong, only
because they were motivated by self interest and maj gen sen lacked
spine to do what is right, notwithstanding the pressure from his
superior officer.the malaise is in the top rungs of officership,
wherein they misuse their rank & authority to manipulate subordinate
officers into wrong doing.character driven leadership is largely
absent among senior officers, who fail to inspire an environment of
military motivation in the army.the past decade has witnessed many
scams and wrong conduct involving senior officers. this will continue
to happen unabated, because the perpetrators of these misdeeds are non
other than those who are entrusted with authority to check these.

corruption in Military
By: Shiva Kant Mishra | Wednesday , 13 Jan '10 10:15:08 AM

I am an ex-serviceman and very pain to read this news about land scam
by top military officers. I am proud to be an old soldier who has
spend his valuable prime youth in force. I still remember the names of
my unit commander who were very honest and they used to spend their
own money for their jawans.But see the morale of the officers who are
involved in corruption. The Govt of India should take immediate
disciplinary action against alitl the officers who are even bit
involved in it.

intence prison ................ for guilty of army officer.
By: anup agarwal | Tuesday , 12 Jan '10 22:33:28 PM

this is ridiculous to see that our army in india is totally corrupted
one .

Intence prison
By: Major (Retd) Virendra Sharma | Wednesday , 13 Jan '10 10:47:13 AM

Anup Agarwal Do not issue a blanket statement like "our army in india
is totally corrupted...". Our Indian army is one of the very few
institutions that still does not condone and save the corrupt elements
irrespective of their position. Every person should be proud if it.
However, let me tell you that the present day army is the mirror of
the current society and it's acceptance of the corruption in the
public life.

Sukhna Army Land Scam
By: lt col p l verma | Tuesday , 12 Jan '10 20:32:49 PM

33 Corps Chief and other senior general officers come under Eastern
Command Chief Lt Gen V K Singh.If the scam involved obtaining NOC for
the land which is a state government subject it is hard to believe
that Gen VK Singh was not aware of it.At times very senior officers
because of their personal interests want to see their brother officers
to get invoved in some kind of dragonian Army Act punishable offences
so thatat their cost they are benefited in promotion matters or for
personal vendetta they act errationally like children without
bothering about the damage they inflict on the image of armed forces
brethren. No doubt no one should be spared if there is a bonafide case
against some body howsoever high one is.Army Chief has to move with
caution and dignity.

Honest army
By: subhash chander tewari | Tuesday , 12 Jan '10 18:08:54 PM

I wonder at the proposition,that an honest army is supposed to defend
interests of a generation of corrupt and immoral politicians,police
and public as well.If the forces of goodness unite no evil can stand.

COURT MARTIAL OF SENIOR OFFICERS
By: JOHN | Tuesday , 12 Jan '10 17:43:32 PM

It is very sad to see that corrupt officers are let off in this way.
This will set a bad precedent and already many are there. In this
country politicians are never punished, but recently officers have
also become untouchable. Secondly, the disciplinary authority should
understand that he as an institution not as an individual taking
actions. The office of Army Chief is no small one and every Indian
feels proud of the person who holds that post. Anyway the Appelette
Authority (Defense Minister) can overrule these decisions.

Sukna LAND SCAM
By: Brig(Retd) A K Joshi | Tuesday , 12 Jan '10 16:51:22 PM

After reading the latest comment,i am of the view that no more
comments be invited as the matter is turning to be murkier and let the
central govt take decision. But it should be done before 31 Jan 2010.
We may however,restrain the COAS from finalising the caselest it is
hit by law of double jeopardy.

Army Chief powers over the senior officers
By: anshul | Tuesday , 12 Jan '10 14:45:45 PM

There is no doubt that the Chief of the Army Staff is empowered to
issue a show cause action before awarding his censure.But the question
arises is the offence so trival for disposal by award of his censure?
As reported in the press, it appears that they had tried to cause
illegal gain to a builder and hence can be said they were primafacie
answerable of offences under sec 52(f)of the Army Act,1950 in which
case there is an embargo on disposal by award of censure. Be that as
it may,any censure given by the COAS to his Military Secretary will
have no effect on him as he(MS)is retiring on 31 Jan and the censure
be erased. But another option is that let the censure be given by the
Central Govt and that will remain in the dossier of the officer
permanently. Again, the question arises is the ends of justice met? I
think let the Central Govt decide.But the COAS by issuing the show
cause notice has foreclosed the option available to the Govt to decide
the course of action.

army officer retd
By: col sc varma | Tuesday , 12 Jan '10 14:29:04 PM

fix and screw with draw medals stop pension andnot permitted to add
his rank IF FOUND GUILTY

Where is the case heading?
By: Abhilash | Tuesday , 12 Jan '10 13:07:35 PM

I see it as two generals COAS and EAC showing there power. One is
present COAS other is likely next COAS.The efficient leaking of report
since oct 27 ,2009 shows the motive of the Officers incharge of
CoI.The image of army has been questioned by people, by media and even
the officers within. I want to question ? 1.When the decision was
taken to change NOC for educational institute what EAC was doing? 33
corps comes under him. Was he not aware, he could have stopped the
decision then and there as he was senior most there? 2.His personal
vendetta against Gen Avdesh Prakash saw the whole drama of CoI.Is not
this the main motive. 3.The land is of state govt. the wrongful gain
clause of act is more apt for Avdesh Prakash offences under sec
52(f)of the Army Act,1950,who shot the gun on Gen Rath's and his
officers shoulder.Showing his seniority, position , even ranking them
seniority wise would show each ones power including COAS?

Gen Kapoor should answer
By: Shikha | Tuesday , 12 Jan '10 12:23:51 PM

The irony is that how could the army cheif let off Lt Gen Avadesh
Prakash with just administrative action when it is such a severe
offence. Sadly the truth is that officers like Gen Deepak Kapoor
impart punishments not on the severity of the offence but on personal
gains... whereas officers have been court martialed on small offences
one sees people like Lt Gen Avadesh Prakash being let off when they
are clearly guilty. Why does Gen Kapoor have different set of rules.
There is definately some truth that is being hidden and maybe the
roots are much deeper than what is being seen on the surface and henve
Gen Kapoor is protecting the offender. Maybe he was scared that he
might be named in the GCM (court martial). Whatever the truth is I
shall reserve my comments and would not like to say anything in a
premature fashion but what Gen Deepak Kapoor has done by making
exceptions is something that he needs to be questioned on and has to
be held accountable for.

Clean way to rinse hands
By: Aarti | Tuesday , 12 Jan '10 14:33:07 PM

Gen Deepak Kapoor would not like to be dragged into all this by giving
smmary termination of services of the accused Lt Gen.. he was the one
who met MaharajaGAj singh of Jodhpur who is patron of MAyo School to
endorse the same Chain of institutions "Geetanjali Trust" which was
declined by Maharaja, also Mrs Deepak Kapoor finds her name as a Board
of Trustees on the same educational Trust's brochure as Lt Gen Avdhesh
finds as Director.. So the scam gets even murkier with Gen himself
involved into this and brotherhood is held upright by him by letting
go the officer lightly.. because it would be really embarassing for
India to see Army Chief questioned and be sent back home just before
the completion of his tenure in March 2010..

Honest Army is must
By: BC Jinnah | Tuesday , 12 Jan '10 11:59:57 AM

A totally honest Army, Navy and Air Force are vital for our India and
its defence. Gen Kapoor must purge and punish the officers who acted
dishonestly, keeping in mind that the Army may one day to run this
country to rid of corrupt politicians and save the country from
falling apart.

Army Chief powers over the senior officers
By: Brig(Retd) A K Joshi | Tuesday , 12 Jan '10 11:54:54 AM

There is no doubt that the Chief of the Army Staff is empowered to
issue a show cause action before awarding his censure.But the question
arises is the offence so trival for disposal by award of his censure?
As reported in the press, it appears that they had tried to cause
illegal gain to a builder and hence can be said they were primafacie
answerable of offences under sec 52(f)of the Army Act,1950 in which
case there is an embargo on disposal by award of censure. Be that as
it may,any censure given by the COAS to his Military Secretary will
have no effect on him as he(MS)is retiring on 31 Jan and the censure
be erased. But another option is that let the censure be given by the
Central Govt and that will remain in the dossier of the officer
permanently. Again, the question arises is the ends of justice met? I
think let the Central Govt decide.But the COAS by issuing the show
cause notice has foreclosed the option available to the Govt to decide
the course of action.

There should be some course to prevent miscarriage of justice.
By: Aarti | Tuesday , 12 Jan '10 14:42:01 PM

With all due respect to you and your seniority in service matters.. i
would like to ask you the very question which every INdian seem to
carry in their minds.. is it so easy to foreclose the options for MoD
and reverse the decision given by the Chief.. after all Chief is not
above the Nation and security lapse in forces..What is there to say
when Mrs Deepak Kapoor also finds her mention on the same brochure as
a BOard of Trustees and who will question Gen Deepak Kapoor for having
met with Maharaja Gaj Singh to get the Educational Trust endorsed with
the accused Lt Gen Avdhesh.. to which , when asked n CoI, he oferred
memory lapse regarding the name of person who went along with him to
meet Maharaja. So, is there not any way which hel Chief answerable to
his actions and accountable to let go officer so lightly where
officers are sacked for trivial issues inArmy.. is it not a matter
enough to be considered serious for him.. or he is just trying to
complete his tenure peacefully by diverting procedure and go to home
peacefully after March 2010.

Curbing corruption in Indan Army
By: Dr. Ram Chander Sharma | Tuesday , 12 Jan '10 11:19:05 AM

The court of inquiry into the Sukhna land scam and the further
initiation of action against the top officers of Indian Army will
definitly a moral booster for the honests. There were for the long
time blemished reports in the Indian defence circles in the
procurement of arms purchases and food, clothings and other
essentntials purchased by the Indian Army. A transparent and
corruption free Defence Ministry and Indian Army will go a long way in
fighing in internal and external enemy threats in the era in
internationl terrorism siot sunderbani.

What happened to 70 acres?
By: arun lal | Tuesday , 12 Jan '10 11:08:34 AM
Did the army get the land back? Was the "bribor" punished?

http://www.indianexpress.com/news/Sukhna%20Land%20scam:%20Army%20Chief%20calls%20for%20administrative%20action/566475/

Sukhna land scam: Army chief promises action
Agencies

Posted: Thursday , Jan 14, 2010 at 1701 hrs

New Delhi:
We will take due action as per the rules in the Army Act: Army Chief

Army Chief General Deepak Kapoor on Thursday promised "due action"
under the Army Act against four generals allegedly involved in the
Darjeeling land scam but said dispensing of justice will not be swayed
by external considerations like "personal biases" and "media
pressure".

"We will take due action as per the rules in the Army Act," he told a
press conference on the eve of Army Day, referring to the subject suo
motu in his opening remarks.

Maintaining that the defence forces are the only organisation that
takes expeditious and judicious action once any irregularities are
found, General Kapoor said it was his responsibilty to "dispense
justice that is firstly fair, secondly just and based on facts of the
case and thirdly it takes into account the culpability of the
individuals involved".

"Fourthly," he said, "justice that is not swayed by external
considerations-- be it personal biases or media pressure or any other
aspect."

General Kapoor said in the Sukhna land case he has received inputs in
the form of Court of Inquiry (COI) and recommendations of the Eastern
Commander and the legal advise of the Adjutant General at the Army
Headquarters.

Four generals-- Military Secretary Avadhesh Prakash, Lt Gen P K Rath,
11 Corps Commander Lt Gen Ramesh Halgali and Maj Gen P K Sen-- have
been indicted by a COI for their role in allegedly issuing 'No
Obejction Certificate' (NOC) to a private realtor.

Comments (5) |

No Promising Business
By: Dinesh | 15-Jan-2010

Every " TAINTED " Officers in land scam should be given Death Penalty
by firing squad, including Officials & Political bosses who " SHIELD "
them. Army Batalions would be like " WAR LORDS " of Talibaan if
Principle and Discipline not maintained, and Corruption not
controlled.

Really? what a surprise!!
By: ajeet | 14-Jan-2010

The fact that there is corruption in the armed forces too, should come
as no surprise to anybody. Ask any person who is employed with a 'non-
combat' wing of the military - the ones that handles constructions,
rations etc., you will hear many "interesting" stories.....

SOME QUESTIONS
By: Raghubir Singh | 14-Jan-2010

Does issuing constitute NOC land scam? If they had power to giving NOC
& it has been exercised what is wrong? Have they sold any land? Did
the generals get any pecuniary benefit or did they cause any loss to
the state? Who has blown the issue of NOC out of proportion -the media
or the other parties interested in the land? Why Army Chief is being
pressurized to punish the generals before their guilt- if any has been
established? Will the media like to uncover equally vociferously
defence land so far grabbed by builder-political-official nexus around
cantonments? Will they get info through RTI route if it is not coming
straightway?

No Wonder!
By: Prasad | 14-Jan-2010

Fifthly, these generals have learnt land grabbing from China. The
fault is with the Chinese for teaching our generals such lessons. So,
with due respect to China, I codone our generals - so said the Indian
army chief.

Accused generals
By: Dr. Ram Charnder Sharma | 14-Jan-2010

The Sukhna land scam allegedely involving the serving General of
Indian Army is getting extra attention of the media as Indian Army
world over known for the integrity, decipline, honesty and free from
political interfernce. Let the outcome of the case is logical and
prompt as one of the accused is retiring at the end of this month.

http://www.indianexpress.com/news/sukhna-land-scam-army-chief-promises-action/567403/

Top army General face court martial in Darjeeling land fraud
Agencies

Posted: Wednesday, Dec 23, 2009 at 1735 hrs

New Delhi:
The inquiry found that Prakash was in constant touch with a Siliguri
real estate developer, Dilip Agarwal, who brokered a controversial
land deal in Darjeeling.

A top Army General faces the prospect of "termination of services",
while three other Generals either a court martial or administrative
action with a probe holding them responsible for a land fraud at
Darjeeling.

Indian Express was first to report this in its Wednesday edition.

The Army headquarters in New Delhi said it had received the inquiry
report on Wednesday from the authorities, who ordered the inquiry, and
that it would analyse the details to initiate action in accordance
with military law.

The report, according to sources, had recommended "termination of
services" of Lt Gen Avadesh Prakash, the Military Secretary at the
Army headquarters, as per Army Act and Army Rules "for unduly
influencing" the transfer of the civilian land adjacent to Sukhna
military station in Darjeeling to a private institution.

It also directed court martial proceedings against Deputy Chief of
Staff designate Lt Gen P K Rath and Major Gen P C Sen, under whose
tenure at 33 Corps headquarters in Sukhna the land fraud took place,
for issuing a No-Objection Certificate to the private institution,
which falsely claimed to start an affiliate of Ajmer-based Mayo
College in the 70-acre land, they said.

The report also recommended that Lt Gen Ramesh Halgali, who is at
present the 11 Corps commander at Jalandhar, and had a minor role in
the NOC episode in his earlier tenure in Darjeeling, should face
administrative action, sources added.

Eastern Army Commander Lt Gen V K Singh, the convening authority of
the probe, had a couple of days ago sent his recommendation to Army
Chief Gen Deepak Kapoor seeking action against the four Generals for
their alleged involvement in the land fraud.

Army officials said it was now up to Kapoor to take a call on the
course to be adopted on Singh's recommendations.

"The Court of Inquiry has been completed and received by Army HQ
today. The proceedings of the Inquiry will now be analysed as per the
existing Standard Operating Procedures in accordance with the military
law," a Army spokesperson said in a statement in the capital.

"It is reiterated that the Army is amongst the few organisations which
is very sensitive to any irregularities and have proactively sought
immediate and timely action against those indulging in any wrongs," he
added.

The Court of Inquiry (COI), headed by Lt Gen K T Parnaik, the General
Officer Commanding of the Tezpur-based 4 Corps, had held the four
officers culpable for their role in issuing the NOC to Dilip Aggarwal
Geetanjali Education Trust, much against the earlier Army stand that
the NOC should not be issued.

After the Darjeeling land controversy broke out, Defence Minister A K
Antony had ordered an independent probe and instructed the Army that
even the top brass should not be spared if the charges were proved.

Comments (1) |

Crooked Generals in army uniform.
By: Jatinder S Hoon | 23-Dec-2009

Make certain that these crooked Generals are not associated with ISI
of Pakistan.Court martial them and fined them heavily for bringing bad
name to the army.It is a extreamly serious offence, specially when
army top generals are involved, it can undermine the country security.

http://www.indianexpress.com/news/top-army-general-face-court-martial-in-darjeeling-land-fraud/558300/0

chhotemianinshallah

unread,
Feb 22, 2010, 8:39:29 AM2/22/10
to
'Swiss black money can take India to the top'
March 31, 2009 19:41 IST

Indian money stashed in the Swiss Bank has become a focal point of
debate, especially after the Leader of Opposition and the Bharatiya
Janata Party's [ Images ] prime ministerial candidate L K Advani
[ Images ] raised the issue on Sunday. If elected, the BJP has vowed
to bring the black money back home. Though the Congress dismissed the
idea, the Swiss bank issue is slowly becoming a hot election issue.

In fact the BJP also plans to carry out a mock election across the
country on April 6 where people will have to cast their vote
indicating whether India [ Images ]n money in Swiss banks should be
brought back to India or not.

During his address, Advani said the BJP will form a task force
comprising experts to prepare a strategic document for India to
recommend ways to get back the national wealth stashed away illegally
by corrupt politicians, businessmen and criminal overlords.

One of the names he mentioned in the task force is Professor R
Vaidyanathan, Professor of Finance at the Indian Institute of
Management, Bengaluru [ Images ].

In this exclusive interview to rediff.com's Vicky Nanjappa,
Vaidyanathan explains in detail the importance of bringing back the
ill-gotten wealth and how the money got there in the first place.

Firstly how much Indian money do you think is stashed away in the
Swiss Banks?

In 2006, the most recent Global Financial Integrity study, developing
countries lost an estimated $858.6 billion (about Rs 43 lakh crore) to
$1.06 trillion (abot Rs 51 lakh crore) in illicit financial outflows.
Even at the lower end of the range of estimates, the volume of illicit
financial flows coming out of developing countries increased at a
compound rate of 18.2 percent over the five-year period analysed for
the study. On average, for the five-year period of this study, Asia
accounts for approximately 50 percent of overall illicit financial
flows from all developing countries.

This report shows that the average amount stashed away from India
annually during 2002-06 is $27.3 billion (about 136,466 crore). It
means that during the five-year period the amount stashed away is
27.3x5=136.5 billion (about 692,328 crore). It is not that all these
amounts went to Swiss banks. It has gone to different tax and secret
shelters. The share of Swiss banks in dirty money being a third of the
global aggregate, some $45 billion out of the 136.5 billion stashed
away from India would have been hoarded in these years in Swiss banks.

The important point is that this is only for five years. More amounts
were stashed away during the Nehruvian regime. So the loot for 55
years will be several times higher. In fact, in those days the rupee
commanded a better value per dollar. So fewer rupee could get more
dollars. So the estimation that the Indian money stashed away may be
of the order of $1.4 trillion (about Rs 71 lakh crore).

On what basis have you come to this conclusion?

There is a lot of literature available as to how to estimate the
illicit financial flow from developing countries. We find out what the
nature of the flow is. I have also relied upon the study Illicit
Financial Flows from Developing Countries: 2002-2006 Global Finanacial
Intergrity authored by Dev Kar and Devon-Cartwright Smith, a project
of the Ford [ Images ] Foundation. Financial flows in the context of
this report includes the proceeds from both illicit activities such as
corruption (bribery and embezzlement of national wealth), criminal
activity, and the proceeds of ilicit business that become illicit when
transported across borders in contravention of applicable laws and
regulatory frameworks (most commonly in order to evade taxes).

Which are the various tax havens, where the ill-gotten wealth of
Indian businessmen and politicians are stashed?

There are presumably more than 70 tax havens in the world. Indian
wealth could be more in Switzerland [ Images ] and various British /US
islands. At least 40 countries market themselves aggressively as tax
havens [Source: Internal Revenue Service USA on Abusive Off-shore Tax
Avoidance schemes Talking Points Jan 2008]. The well-known tax havens
are Switzerland/ Liechtenstein/Luxemburg/ Channel Islands etc.

Could you elaborate and tell us how the money got there in the first
place?

There are several methods/reasons. Under invoicing/over invoicing of
exports and imports and getting the balance stored abroad. Kickbacks
from major defense/civilian contracts. Not bringing the earnings
abroad. In the old days smuggling of gold and illegal money.
Transactions done abroad and not reported here. Hawala funds. Funds
earned by artists/ entertainment industry /sports people and stashed
abroad. When you want to indulge in adharma, hundreds of ways are
open!

We would like to know the terror connection. Do you think even
terrorists are stashing away cash and using the tax haven route to
send across money all over the world, to finance their activities?

M K Narayanan, our National Security Advisor, has spoken about it in
Berlin recently.

Advani says that it is important to bring this money back. How can the
government go about it and what are the various ways in which India
can get its money back?

Put it on the Global Agenda. Put it in G-20. Put it in the
International Monetary Fund. Put it in Egmont Group. Also take a lead
among all developing countries. Support US /German/French efforts.

If India decides to take the initiative, will the Swiss authorities
cooperate?

It is not due to our pressure but that of US which will make them co-
operate. When a family is in deep financial crisis then it tries to
look at the small amount saved under the sugar jar by grandma. Same
way developed economies are desperate for every dollar. Even if we do
not act due to their efforts the list of crooks may be out, then we
will be in a dangerous social situation since the who's who of India
will be there. Instead we should get it and get the funds and decide
on the steps to sterilise it. Otherwise, the world will laugh at us.

Politicians sure must be having a lot of money in Swiss Banks. Do you
think this factor will deter the government from acting?

Public pressure will make them do it. Plus, the evolving global
situation against tax havens. The money belongs to the poor farmers
and unorganised workers of India. Also, Indian businessmen have a lot
of their ill-gotten gains in these banks. The world situation is such
that Indian businessman will want to bring it back now given the
attractive returns in India.

Do you think that the Indian government should demand all the Indian
black money in Swiss banks?

Of course. India should and must act. We are not a banana republic.

You wrote in your column that the German foreign intelligence agency
BND got names of 1,400 clients of the Liechtenstein-based LTG bank who
were supposed to be suspected tax evaders. Of the 1,400, 600 were
supposed to be Germans. Do you think of the remaining there will be
Indians as well? Has the Indian government approached the German
government for the list?

Indian names will be there. Our tax evaders and crooks are like the
omnipresent Maha Vishnu [ Images ] -- present in all continents and
all tax havens. But our government has been lukewarm in this issue. It
should have despatched immediately senior officials to get the names.

Isn't it important to tackle the issue of domestic black money?

It is definitely important. At least the domestic black money is used
in our economy and to that extent it is productive. But the money kept
in Swiss banks is neither useful to India nor does it benefit Indians.

What role should the media play?

The media has a very important role to play. At the moment it seems
like most part of the media is more interested in the diet of an
actress. Pressure by the media needs to be built up on this issue and
remember that a lot of Indians don't just go to Switzerland to ski.

What about the names of these persons?

India must try and get the names. But more importantly should get the
money back. It should be top on the agenda and India ought to take a
moral lead in this issue.

Will the Indian economy improve if the money is brought back?

It will do phenomenally. India will be in the top five league if all
the ill-gotten money is brought back. It will change the Indian
scenario and I have been saying this since 1993.

Do you think that these people will now try and pull out the money
since this issue has become a hot topic?

I don't think so. If they do then India should create an instrument
and regulate frameworks to bring the money back.

What kind of punishment do you suggest for these persons?

Punishment is not the issue now. There is a need to create fear in
them and follow what the international community does on this issue.

Lastly do you think this is becoming just another election issue?

The US and Germany [ Images ] took the lead and there is no election
there. We should not treat this as an election issue. We have to take
up this matter and if we don't then we will become a laughing stock of
the entire world.

Vicky Nanjappa

Discussion Board

Showing 1-10 of total 585 messages

http://election.rediff.com/interview/2009/mar/31/inter-swiss-black-money-can-take-india-to-the-top.htm

Germany offers black money data, India dithers
Vishwa Mohan, TNN, May 21, 2008, 12.44am IST
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NEW DELHI: Investigators in India might have their best chance yet to
trace those Indians who have stashed away millions in the tiny tax
haven of Liechtenstein, a small landlocked country between Austria and
Switzerland, provided the Manmohan Singh government asks for the
information on offer.

The dope on hundreds of rich Indians who have black money parked in
Liechtenstein could be made available to the authorities here as the
German government, which has obtained a list of account holders at
Liechtenstein's LTG Bank, is willing to part with the names.

Several countries including the US, the UK, Canada, Italy, Norway,
Sweden, Finland and Ireland have already used the opportunity to zero
in on their citizens who have evaded taxes and smuggled their wealth
to the principality, the sixth-smallest country in the world. But
Transparency International says India has maintained 'a stoic silence
over the issue and has not approached the German government for this
data'.

Expressing concern over the Indian government's apparently
lackadaisical attitude in getting after offenders who have cheated the
tax authorities of millions of dollars is quite surprising and the
Indian chapter of TI - an organization campaigning to reduce
corruption - has urged the government to take all necessary steps to
seek the data.

Admiral R H Tahiliani, chairman if TI India and a former navy chief,
said: ''This money belongs to the people of India and it is possible
that it has been tucked away in this distant country by those who have
acquired it illegally and are now evading taxes.

"There should be complete transparency and accountability about this
money and it is for the government to find this out and inform
people," Admiral Tahiliani, said, referring to the black money stashed
away abroad.

Indeed, the offer looks too good to refuse. It is a bit like being
served secrets on a platter and if the government does not waste time
looking a gift horse in the mouth, it could get data that might
otherwise never be accessed given the laws that protect tax havens
that often require specific proof of criminality.

In fact, the dice is invariably loaded against investigators - for
example the Hindujas were able to delay proceedings in the Bofors case
by challenging each application filed by CBI.

Suspecting that the government's chariness could stem from fears that
influential politicians and industrialists might be compromised by the
Liechenstein data, TI has, in a statement, said: "It is alleged that
this money belongs to rich and powerful politicians, industrialists
and stock brokers and that is why the reluctance on the part of
government of India (to get details from Germany)."

Liechtenstein, like Switzerland, St Kitts, Canary Islands, Antigua and
Bahamas, has been a haven for wealthy people to hide their ill-gotten
wealth away from the prying eyes of tax authorities. Referring to
reports, TI mentioned that German intelligence agency - BND - has
details of about 800 clients of LTG Bank - run by Liechtenstein's
ruling dynasty - and prosecutors are using this information to target
suspected tax evaders.

"The ministry of finance and PMO have, however, not shown much
interest in finding out about those who have their lockers on the
secret banks of Liechtenstein which prides itself in its banking
system," TI said.

Referring to such banking systems, TI also said that secretive and non-
transparent tax havens could be used for money that is related to
drugs and terrorism. These accounts have been frequently used to
channel money for purchase of arms.

(vishwa...@timesgroup.com)

http://timesofindia.indiatimes.com/Germany_offers_black_money_data_to_India/articleshow/3057422.cms

Black Money In Swiss Bank
Swiss Banking Association report 2006

by Naman Sood on Apr 15, 2008 01:44 PM

Deposits in Banks located in the territory of Switzerland by nationals
of following countries

Top 5

India---- $1456 billion
Russia----- $470 billion
UK-------- $390 billion
Ukraine $100 billion
China------ $96 billion

Now do the math India with $1456 billion or $1.4 trillion has more
money in Swiss banks than rest of the world COMBINED.

Public loot since 1947: Let us bring back our money

M R Venkatesh | April 15, 2008 | 09:34 IST

It is one of the biggest loots witnessed by mankind -- the loot of the
aam aadmi (common man) since 1947 by his brethren occupying public
office.

It has been orchestrated by politicians, bureaucrats and some
businessmen. The list is almost all-encompassing. No wonder, everyone
in India loots with impunity and without any fear.

What is even more depressing in that this ill-gotten wealth of ours
has been stashed away abroad into secret bank accounts located in some
of the world's best known tax havens. And to that extent the Indian
economy has been striped of its wealth.

Ordinary Indians may not be exactly aware of how such secret accounts
operate and what are the rules and regulations that go on to govern
such tax havens. However, one may well be aware of 'Swiss bank
accounts,' the shorthand for murky dealings, secrecy and of course
pilferage from developing countries into rich developed ones.

In fact, some finance experts and economists believe tax havens to be
a conspiracy of the western world against the poor countries. By
allowing the proliferation of tax havens in the twentieth century, the
western world explicitly encourages the movement of scarce capital
from the developing countries to the rich.

In March 2005, the Tax Justice Network (TJN) published a research
finding demonstrating that $11.5 trillion of personal wealth was held
offshore by rich individuals across the globe. The findings estimated
that a large proportion of this wealth was managed from some 70 tax
havens.

Further, augmenting these studies of TJN, Raymond Baker -- in his
widely celebrated book titled Capitalism's Achilles Heel: Dirty Money
and How to Renew the Free Market System -- estimates that at least $5
trillion have been shifted out of poorer countries to the West since
the mid-1970s. It is further estimated by experts that one per cent of
the world's population holds more than 57 per cent of total global
wealth, routing it invariably through these tax havens. How much of
this is from India is anybody's guess.

What is to be noted here is that most of the wealth of Indians parked
in these tax havens is illegitimate money acquired through corrupt
means. Naturally the secrecy associated with the bank accounts in such
places is central to the issue, not their low tax rates as the term
'tax havens' suggests. Remember Bofors and how India could not trace
the ultimate beneficiary of those transactions because of the secrecy
associated with these bank accounts?

Black Money In Swiss Bank

Swiss Banking Association report 2006
by Naman Sood on Apr 15, 2008 01:44 PM

Deposits in Banks located in the territory of Switzerland by nationals
of following countries

Top 5

India---- $1456 billion
Russia----- $470 billion
UK-------- $390 billion
Ukraine $100 billion
China------ $96 billion

Now do the math India with $1456 billion or $1.4 trillion has more
money in Swiss banks than rest of the world COMBINED.

Public loot since 1947: Let us bring back our money

M R Venkatesh | April 15, 2008 | 09:34 IST

It is one of the biggest loots witnessed by mankind -- the loot of the
aam aadmi (common man) since 1947 by his brethren occupying public
office.

f this report is true that means being rotten to the core really pays
good, and being honest really sucks. I want my share of the loot it,
or I'll wreck the system. yes rich countries are looting the poor
countries who are ran by corrupted administrators, everybody knows..
so what? Nothing will ever change till teh Judgement Day. So cool of
brother.
16 May 2008 09:50Reply Quote & Reply

pankajshah

MVP:30 Rank:1,913,210 Blood money:

We pray to god that someday it will dawn upon swiss government that
this is the blood money & must be returned to its rightful owners. The
least they can do is to declare the amount being hold by them,if they
cannot disclose the owners of the funds.
13 Apr 2009 09:03

http://resources.alibaba.com/topic/288746/Black_Money_in_Swiss_bank.htm

India will unearth illegal money stashed abroad: President

New Delhi, Feb 22 : India will take all the steps necessary to unearth
black money stashed abroad, with negotiations already on with a number
of tax havens for sharing such information, President Pratibha Patil
said Monday.

"India is an active part of the global efforts to facilitate exchange
of tax information and take action against tax evaders," the president
told the joint session of parliament to kick-off the budget session.

"My government has undertaken a number of steps to unearth unaccounted
for money parked outside India. These include amendment of the Income
Tax Act, 1961, to enable the central government to enter into tax
agreements with non-sovereign jurisdictions."

While no official data is available on the quantum of slush funds, it
is estimated that such black money stashed away by Indian nationals in
tax havens overseas could be worth nearly USD 140 billion.

According to the president, steps have already been initiated for
negotiating what are called agreements for exchange of information
with major jurisdictions so as unearth illegal money.

"Re-negotiation of the Tax Treaty with Switzerland is in process."

According to the Organisation for Economic Cooperation and Development
(OECD), India is among the 40-odd nations that have substantially
implemented the globally accepted norms on exchange of information on
tax.

Finance Minister Pranab Mukherjee has also ordered re-negotiation of
all the 77 double-tax avoidance pacts entered into so far to get real
time information and track tax evasions or stashing away of black
money in other countries.

--IANS

http://www.newkerala.com/news/fullnews-56995.html

Govt renegotiating with Swiss Govt over black money
Agencies
Posted: Feb 22, 2010 at 1122 hrs IST

New Delhi Government is renegotiating the tax treaty with Switzerland
to unearth unaccounted money parked outside India.

Addressing Parliament on the first day of Budget session, President
Pratibah Patil said steps have already been initiated for negotiations
to enter into agreements for the exchange of information with major
jurisdictions.

"My government has undertaken a number of steps to unearth unaccounted
money parked outside India. These include amendment of the Income-tax
Act, 1961 to enable the Central Government to enter into tax
agreements with non-sovereign jurisdictions," she said.

Patil said "Renegotiation of the Tax Treaty with Switzerland is in
process. India is an active part of the global efforts to facilitate
exchange of tax information, and to take action against tax evasion."

Various political parties and groups have been claiming that the black
money stashed away in Swiss banks by Indians exceed one trillion
dollars, a claim refuted by Swiss bankers who say no such statistics
exist.

Renegotiation of the Double Taxation Avoidance Agreement treaty, which
was signed in 1995, would enable India seek details of specific cases
where tax evaders money was lying in Swiss banks.

http://www.expressindia.com/latest-news/Govt-renegotiating-with-Swiss-Govt-over-black-money/582804/

Govt renegotiating treaty with Switzerland to track black money
Press Trust Of India
New Delhi, February 22, 2010

First Published: 12:33 IST(22/2/2010)
Last Updated: 13:17 IST(22/2/2010)

The government is renegotiating its tax treaty with Switzerland to
track unaccounted money stashed outside India, President Pratiba Patil
said while addressing Parliament on the first day of Budget session.

"My government has undertaken a number of steps to unearth unaccounted
money parked outside India. These include amendment of the Income-tax
Act, 1961 to enable the Central Government to enter into tax
agreements with non-sovereign jurisdictions," she said.

"Renegotiation of the Tax Treaty with Switzerland is in process. India
is an active part of the global efforts to facilitate exchange of tax
information, and to take action against tax evasion," Patil said.

Various political parties and groups have been claiming that black
money stashed away in Swiss banks by Indians exceed one trillion
dollars, a claim refuted by Swiss bankers who say no such statistics
exist.

Renegotiation of the Double Taxation Avoidance Agreement treaty, which
was signed in 1995, would enable India seek details of specific cases
where tax evaders money was lying in Swiss banks.

http://www.hindustantimes.com/News-Feed/newdelhi/Govt-renegotiating-treaty-with-Switzerland--to-track--black-money/Article1-511530.aspx

Black money: Govt renegotiating tax treaty with Switzerland

NEW DELHI: The Government is renegotiating the tax treaty with
Switzerland to unearth unaccounted money parked outside India.

Addressing Parliament on the first day of Budget session, the
President, Ms Pratibah Patil, said steps have already been initiated
for negotiations to enter into agreements for the exchange of
information with major jurisdictions.

"My Government has undertaken a number of steps to unearth unaccounted
money parked outside India. These include amendment of the Income-Tax
Act 1961 to enable the Central Government to enter into tax agreements
with non-sovereign jurisdictions," she sai d.

Ms Patil said: "Renegotiation of the Tax Treaty with Switzerland is in
process. India is an active part of the global efforts to facilitate
exchange of tax information, and to take action against tax evasion."

Various political parties and groups have been claiming that the black
money stashed away in Swiss banks by Indians exceed one trillion
dollars, a claim refuted by Swiss bankers who say no such statistics
exist.

Renegotiation of the Double Taxation Avoidance Agreement treaty, which
was signed in 1995, would enable India seek details of specific cases
where tax evaders' money was lying in Swiss banks. -- PTI

http://www.thehindubusinessline.com/businessline/blnus/14221202.htm

Baba Ramdev to check corruption
TNN, Feb 22, 2010, 03.52am IST

PATNA: Yoga Guru Baba Ramdev on Sunday said here that his outfit
Bharat Swabhiman will field its candidates in the next Lok Sabha polls
if the Central government fails to bring back all black money from
Swiss and other foreign banks and utilize it in the development of the
country.

The Yoga Guru said that the system of governance in the country should
be Indianized. He said that his outfit was committed to the cause of
checking black money and corruption, besides emphasising on
Bhartiyakaran (Indianization).

Ramdev, however, said that he would himself play the role of Chanakya
and not be directly involved in politics. I shall not be a contender
to power personally, said the Yoga Guru.

Baba Ramdev on Sunday said that the country achieved freedom on August
15, 1947, whereas in reality that day the power was just transferred
from the hand of Britishers to their "manas putras".

He demanded that there should be provision of awarding capital
punishment to those who are corrupt as it affected adversely the
progress and development of the country and deprived its common people
of their due. Baba Ramdev said that mines of the country are being
sold at Kauri ke mol (throw away price) by the Central government.

http://timesofindia.indiatimes.com/articleshow/5600397.cms

Govt taking steps to unearth unaccounted money: President

New Delhi, Feb 22 : President Pratibha Devisingh Patil today said the
government is re-negotiating tax treaty with Switzerland and taking a
number of other steps to unearth unaccounted money parked outside
India.

''India is an active part of the global efforts to facilitate exchange
of tax information and to take action agianst tax evasion,'' Ms Patil
said in her address to the Joint Session of Parliament.

She said the Income Tax Act, 1961 has been amended to enable the
Central Government to enter into tax agreements with non-sovereign
jurisdictions. Steps have already been initiated for negotiations for
entering into Agreements for the Exchange of Information with major
jurisdictions, she informed.

The President's announcement is significant as the Opposition has been
criticising the government in the past for not taking enough steps to
bring back the black money kept by Indians abroad especially in banks
of Switzerland.

--UNI

http://www.newkerala.com/news/fullnews-56661.html

Black money trail: FATF in India
11 Dec 2009, 0315 hrs IST, ET Bureau

A team from the Financial Action Task Force (FATF), an inter-
governmental body that sets benchmarks for legislation on money
laundering, is in India to assess the country's legal and enforcement
framework. The assessment, which ends on Friday, will set the ball
rolling for New Delhi's membership of the elite body.

What is money laundering?

Illegal activities such as drug trafficking, trade in weapons and
white collar crimes can generate large sums of money. Money laundering
refers to the act of making these gains legitimate by disguising the
source of money, changing its form or moving it to a location where
not many questions are asked.

The usual way is to put the money into the financial system by
breaking it down into small deposits. The funds are then moved to
different accounts with multiple banks. In the third stage, the money
is used to acquire real assets, which then create legitimate gains.
The estimates of money laundered range from 2-5 per cent of the
national income.

What are the implications?

Unchecked money laundering makes monetary management difficult as
there is no fix on the money supply. A country that is soft on illegal
money risks losing foreign investments and can also attract unsocial
elements. Such elements may gradually use their money power to acquire
influence and undermine the system. Laundered money could also be used
to finance terror.

What is the role of the FATF?

The FATF was founded by the G-7 countries in 1989 to develop and
promote national and international policies to combat money laundering
and terror financing. The membership of the FATF is limited to 35
countries at present. India has an observer status. It is a member of
the Asia-Pacific Group, a FATF-style regional body.

How does FATF counter money laundering?

The FATF issued a set of 40 recommendations in April 1990 that provide
a comprehensive plan to fight money laundering. The body came out with
eight special recommendations in 2001. In October 2004, it published
Ninth Special Recommendations. FATF member countries have to comply
with these recommendations.

How will FATF membership benefit India?

Membership of the body will allow India easy access to real-time
information on money laundering and terror financing. India, a victim
of terrorism, can raise the diplomatic pitch against perpetrators. It
will also make India more attractive in the eyes of global investors.

What is the regulatory regime in India?

The Prevention of Money Laundering Act, 2002, forms the core of the
legal framework in India. PMLA and the rules notified thereunder are
in effect from July 1, 2005. FIR-IND and Enforcement Directorate are
the two agencies responsible for PMLA implementation. The Financial
Intelligence Unit, a central agency that receives information,
analyses and processes the data and disseminates it to national and
international authorities.

http://economictimes.indiatimes.com/Black-money-trail-FATF-in-India/articleshow/5324865.cms

real are the figures on black money abroad?'
Business Standard / New Delhi April 22, 2009, 0:41 IST

Though there are different views on the Global Financial Integrity
numbers that the BJP cites, getting the money back to India is not
going to be an easy task.

S GURUMURTHY
Convener, Swadeshi Jagran Manch

'The OECD threat of sanctions has got some tax havens to cave in -- so
India can get its funds back if it joins the global crusade. Apart
from the Congress, other political parties want this'

A lot of 'black wealth' from India flows to Switzerland every year.
This is not what LK Advani is saying, but is something Dominique
Dreyer, the Swiss Ambassador to India, said at the 60th anniversary of
the Indo-Swiss Friendship Treaty last year. The first serious work on
the global stock of illicit money was done by Raymond W Baker, a
Harvard and Brookings scholar. His book Capitalism's Achilles Heel --
Dirty Money and How to Renew Free Market System (2005) estimates the
stock of illicit money at $11.5 trillion, to which one trillion gets
added annually. Around $500 billion a year flow to the rich from the
rest, according to Baker. Aided by the Ford Foundation, the Baker-
headed Global Financial Integrity (the GFI is a programme of the
Washington-based Centre for International Policy) has estimated the
country-wise flows of illicit money. It puts the outflow from India
during 2002-06 at $137.5 billion (Rs 6.88 lakh crore). How much more
could the loot since 1947 be? Dev Kar, who was involved in the GFI
study, has clarified that the GFI estimates of the loot from India are
an understatement.

Can India win the loot back from Swiss banks and elsewhere? It's
doable, but this requires a sustained global effort. India needs to
get the past loot back and to stop ongoing plunder. Safe havens and
secret banks make this pillage unstoppable by any nation on its own.
Collective coercion is needed. The Organisation for Economic Co-
operation and Development (OECD) formulated transparency rules which
were approved by the G20 in 2004; and by the UN Committee of Experts
on International Co-operation on Tax Matters in 2008. The US, UK,
France and Germany are now using the OECD and G20 platforms to
threaten the Swiss and the rest with sanctions if they do not mend
their laws to comply with the OECD norms. So far, six tax havens
including the Swiss have succumbed. Forced by the economic crisis, the
West, for whom financial secrecy was a sacred part of an individual's
privacy, has taken a U-turn to declare it as evil today. The day
secret banking is outlawed is not far off. But India needs more.
Richard Murphy, a chartered accountant in the UK who fights against
tax havens, says that developing countries (read India) need a better
model to break the secrecy than the OECD one -- under which the country
seeking information needs to give the name and account numbers of the
suspected looter. India needs to fight for a better regime.

India must be a leader in this global crusade. But look at what it
does instead. It does not welcome the OECD endeavours, it does not
join the G20 efforts, nor does it ask for the Indian names hidden in
the secret LGT Bank data offered by the German government. The media
claims that the officials here have advised the Indian envoy in
Germany not to pester the government there for the LGT bank secrets!
Worse, not long ago, India allowed the fugitive Ottavio Quottrocchi to
take back the Bofors loot kept frozen by the Central Bureau of
Investigation. All this has led to a perception that India is not
serious about getting its illicit wealth back. This perception, which
undermines our moral character and impedes our efforts, needs to
change. But, a welcome national consensus is emerging today with the
BJP, CPI(M), AIADMK, SP and BSP -- but regrettably not the Congress --
taking up the issue. It is primarily a global battle with national
effort as a critical additive. A determined India can do it. The
global situation cannot be more ideal for its efforts.

com...@gurumurthy.net

JAIRAM RAMESH
Member of Parliament, Rajya Sabha

'The GFI has a range of $4.7-$22.7 billion but the BJP cites only the
top figure. Since the data doesn't account for capital inflows, it is
incomplete and has other problems as well'

That there are Indians with Swiss bank accounts is incontrovertible.
There can also be no dispute on the fact that we need to try and get
this money back. We have had amnesty schemes in the past -- some have
succeeded and some have not. But in the six years that LK Advani's
party was in power, did they take a single step to get details of
Indian accounts in Swiss banks? In contrast, after the Liechtenstein
bank disclosures on individuals who had accounts with it, our
government has been in touch with the German authorities to get
details of the Indians who have deposits there. That said, how much
money there is in overseas banks? The question of how to get it back,
and whether this can be done in the period Advani has in mind, all
come later.

The BJP leader has cited obscure sources on the internet, none of
which are really reliable. He has also used the Global Financial
Integrity (GFI) report of the Washington-based Centre for
International Policy. But the GFI estimates are based on modelling,
they are not based on bank records of individuals. And while using
this report, the BJP has deliberately suppressed vital aspects of the
study. I have corresponded with the main author of the report to
corroborate the points I'm making.

First, the study is academic in nature. It is not like the
Liechtenstein data which has individual records.

All the capital flight from India in the period 2002-06, which the
report tries to estimate, took place through under-invoicing of
exports (to keep export dollars abroad) or through over-invoicing of
imports (to send out more dollars than actually required). The kind of
trade policy reforms that are being carried should logically have
reduced the amount that was traditionally kept abroad through such mis-
pricing. More important, the GFI methodology is not as robust as you'd
think. The methodology relies on the difference in the unit price that
is obtained from India's exports data and that obtained from the US
import data -- in the case of exports, it is India's import data and US
export data. This works well in high-value exports where the unit
values are easily arrived at. But since most Indian trade is in low-
value segments where the unit values are not available at sufficiently
disaggregated levels, this makes the exercise somewhat dicey.

The GFI study cites a range for capital flight. As the main author of
the study Dev Kar puts it, "When one is talking about the clandestine
outflow of black money from a country, it is much harder to defend a
number than to defend a range of possible outflow values." The range
the study gives is between $4.7 billion and $22.7 billion each year
between 2002 and 2006. Advani cites only the top figure. The change in
exchange rates would also affect the figures for the later years, but
the BJP does not mention this.

The GFI exercise looks at gross outflows from trade mispricing. It
does not account for capital inflows which also need to be taken into
account since black money also comes back. When you look at India's
capital account, there is a negative flow; that is, there is a
possible reversal of capital flight! This knocks the bottom out of the
Advani campaign.

Once you keep these factors in mind it becomes pretty clear the 'data'
cited by Advani does not exist, and he is distorting the studies he's
quoting.

(As told to Sunil Jain)

http://www.business-standard.com/india/news/%5Chow-real-arefiguresblack-money-abroad%5C/355844/

chhotemianinshallah

unread,
Feb 22, 2010, 8:48:01 AM2/22/10
to
Our Indians’ money - 70,00,000 crores Rupees in Swiss Bank

Yes, 70 lakhs crores rupees of India are lying in Switzerland banks.
This is the huge black amount parked in foreign Bank, as India is the
champion of Black Money among all 180 countries of the world.

German Government officially wrote a letter to Indian Government that
they (German Government) are willing to inform the details of holders
of 70 lakh crore rupees in foreign Banks, if Indian Government
officially asks them.
On 22nd May, 2008, this news already published in The Times of India
and other Newspapers based on German Government’s official letter to
Indian Government.

But the Indian Government did not send any official enquiry to Germany
for details of said money which are sent outside India between 1947 to
2008. The opposition party is also equally not interested in doing so
because most of the amount is owned by these dirty, sinful and traitor
politicians.

This money belongs to our country. From these funds we can repay 13
times of our country’s foreign debt. The interest alone can take care
of the Centre’s yearly budget. People need not pay any taxes and we
can pay Rs. 1 lakh to each of 45 crore poor families.

Let us imagine, if Swiss Bank is holding Rs. 70 lakh crores, then how
much money is deposited in other this kind of 69 Banks in foreign? How
much they have deprived the Indian people after freedom? More over if
the account holder dies the Bank become the owner of the funds in his
account.

Are these people totally ignorant about the philosophy of Karma? What
will this illgotten wealth do to them and their families when they own/
use such corrupted and sinful money ? It will ruin their family and
their future generation.

On 20th February, 2009 the American President Mr. Barack Obama has
exerted immense pressure on USB Bank to disclose the details of
deposits by tax evading/corrupt Americans in this Bank. He has taken
this step even at the risk to his life. On the other hand, our
political leaders have not taken any action despite lapse of 8 long
months. The Opposition Parties also are not interested. Why?

Now the Communist Party of India has demanded on 23rd February, 2009
that the Government must inquire into these illegal deposits of
Indians in foreign Banks. This is widely reported in the Press and is
now a well known fact.

The issue of illegal deposits in Foreign Banks has had world-wide
coverage in the media. People have read it also. However, disheartened
and frustrated people have neither courage nor time to do anything.
Nonetheless this is a struggle no less important than our freedom
struggle. Only difference is that this struggle is against the corrupt
native British of our own country.

As a service to our motherland please circulate at least 10 copies of
this note among your friends to convert it into a mass movement.

AWAKE, ARISE ! THIS IS THE MISSION FOR ALL OF US ! WE WILL NOT REST
UNTILL WE GET BACK OUR MONEY

http://indianblackmoney.com/

Transparency International says India should act on Liechtenstein

Transparency International, India, issued this press release today. I
think it worth reproducing in full:

Transparency International, India is concerned over the attitude of
the Indian Government in seeking information from the German
Government about millions of dollars of un-accounted-for money,
belonging to the people of India, lying in Liechtenstein, a small
country near Germany.

The Indian Chapter of Transparency International, an International not-
for-profit organization, working towards reducing corruption, has
urged the Government of India to take all necessary steps to seek the
data that the German Government had offered, free of charge in
February this year.

Reacting to a report by one of the newspapers, Chairman, Transparency
International India, Admiral (retd.) R H Tahiliani said this
morning,”this money belongs to the people of India and it is possible


that it has been tucked away in this distant country by those who have

acquired it illegally and are now evading tax. There should be


complete transparency and accountability about this money and it is

for the Government to find this out and inform people".

Earlier, German Government had offered to provide information on
accounts to various nations, world over including India, without
charging any fees. USA, Finland, Norway, Sweden, Canada, Italy, U.K,
Ireland and other nations expressed interest in obtaining this data.
The Indian Government however has maintained a stoic silence over the
issue and has not approached the German Government for looking into
this data. It is alleged that this money belongs to the rich and


powerful politicians, industrialists and stock brokers and that is why

the reluctance on the part of Government of India, since the
revelation of names could lead to the fall of Government.

Liechtenstein, like many other countries including Switzerland, St
Kitts, Antigua and Bahamas, is a haven for moneyed people to hide
their ill gotten wealth. The crown prince of this country is alleged
to be angry with Germany for spearheading a crackdown on tax evasion
investigation involving funds hidden away in his country’s vaults. It
is being said that the German intelligence agency, BND, has details of
more than 700 clients of the LTG Bank and German prosecutors are using
this information to target hundreds of suspected tax evaders.

The Indian Ministry of Finance and PMO have however not shown much
interest in finding out about those who have their lockers in the
secret banks of Liechtenstein which prides itself of their banking
system. India is a responsible member of various world forums and a
time when we are talking of transparency and accountability, should it
not be the duty of our Government to seek information and reveal the
names of the people who have stashed away their ill gotten wealth
abroad, in a bid to evade tax?

Such secretive and non transparent tax havens can pose problems of
terrorism since no one knows how these will be used. It’s a global
threat and can be used any which way to harm the peace and harmony
globally.

More importantly, it is our money and people of India have a right to
know about the details. It belongs to us and cannot be denied to us
for long .Its time we all woke up and demand what is rightfully ours.

The obvious question is, why is India taking this attitude. Does it
know there are embarrassing names on that list?

Source: http://www.taxresearch.org.uk/Blog/2008/05/16/transparency-international-saysindia-should-act-on-liechtenstein/

16th May 2008

http://indianblackmoney.com/Transperancy2.asp

Real support for Terrorism comes from Black Money

Indians hold $1.4 trillion black money out of the $ 2.15 trillion
deposited in the Swiss bank. Terrorism gets a great deal of support
from such money, but the government is not making enough efforts to
check this.

THE RECENT bomb blasts in Delhi and earlier bomb blasts in Ahmedabad
and Mumbai are some of the latest examples of terrorists’ attacks. The
list is endless. The central and state, governments seem to have
failed in preventing these blasts. In other words, all kinds of
security measures have failed.

Interestingly, the government does not seem to be paying attention
towards the real cause of terrorism. In fact, real cause of terrorism
lies in black money. As we know, for any kind of terrorist activities;
money is needed and in India, black money is easily available to
terrorists. So, I think, the government should think on this aspect
too, so that such activities could be minimized.

Recently, the Swiss banking association made a big revelation by
saying that Indians hold 1.4 trillion US dollars in black money out of
their 2.15 trillion dollars deposit. In spite of that, Indian
authorities are not worried about this. Even they are not willing to
take action against the culprits.

Moreover, there are some other well known ‘slush parks’ like St Kitts,
Antigua, Bahamas, Isle of Man and Liechtenstein that reproduce such
property multiple.

Further, information of unlawful financial records in Liechtenstein’s
LGT Bank can be made accessible to the establishment here, as the
German authorities have the record of account holders and are
agreeable to reveal the names. However, Delhi has not asked for the
names. It prefers stillness.

Black money is siphoned off to these tax heavens where banking secrecy
laws make certain safeguards. As a result, corruptions at every level,
terrorism and all kinds of other illegal actions are flourishing in
India.

The Mauritius route is well known to those looking to spend their
black money. On account of the deficient in of rigorous laws in this
country and other such countries; there have been attempts to bring
back black money in the form of investments for gaining authenticity.

The government should put pressure on Mauritius and such countries,
but alas, this sorry state of affairs is still in full swing in abroad
due to lack of determination of the Indian government. Right now, main
source of black money are gifts (in the name of religion & education)
and hawala.

For example, SIMI and Indian Mujahideen are getting funds from
Pakistan through the way of Nepal & Bangladesh. Thus, their members
are opening accounts in rural and urban areas in India without any
problem. Our intelligence and other agencies are not fully equipped to
trace out their identifications.

Indian bankers are aware of this vicious circle. In fact, they at all
times, stay behind under the pressure of annual budget allotted to
branch managers from the management. For achieving the annual deposit
target, they are opening the accounts of members of SIMI & Indian
Mujahideen without asking any question to them. Even they remain
silent while bulk deposit is being deposited by terrorists, whereas
Reserve Bank of India’s guidelines are explicit in this regard.

Even RBI has issued circulars to all nationalised and private banks
wherein details of all active terrorist organisations have been given.
Thus, this is in reality awfully pathetic stipulation because by the
help of bankers terrorists are legalizing the black money.

Experts are intensely concerned regarding the escalating manipulation
and unfavorable bang of black currency on the financial system. If we
don’t curb expansion of black money in India, we will not be able to
minimize terrorism.

Source: CJ Satish Singh
12th November, 2008

http://indianblackmoney.com/RealSupport3.asp

Public Loot since 1947: let us bring back our Money

It is one of the biggest loots witnessed by mankind — the loot of the


aam aadmi (common man) since 1947 by his brethren occupying public
office.

It has been orchestrated by politicians, bureaucrats and some
businessmen. The list is almost all-encompassing. No wonder, everyone
in India loots with impunity and without any fear.

What is even more depressing in that this ill-gotten wealth of ours
has been stashed away abroad into secret bank accounts located in some
of the world’s best known tax havens. And to that extent the Indian
economy has been striped of its wealth.

Ordinary Indians may not be exactly aware of how such secret accounts
operate and what are the rules and regulations that go on to govern
such tax havens. However, one may well be aware of ‘Swiss bank
accounts,’ the shorthand for murky dealings, secrecy and of course
pilferage from developing countries into rich developed ones.

In fact, some finance experts and economists believe tax havens to be
a conspiracy of the western world against the poor countries. By
allowing the proliferation of tax havens in the twentieth century, the
western world explicitly encourages the movement of scarce capital
from the developing countries to the rich.

In March 2005, the Tax Justice Network (TJN) published a research
finding demonstrating that $11.5 trillion of personal wealth was held
offshore by rich individuals across the globe. The findings estimated
that a large proportion of this wealth was managed from some 70 tax
havens.

Further, augmenting these studies of TJN, Raymond Baker — in his


widely celebrated book titled Capitalism’s Achilles Heel: Dirty Money

and How to Renew the Free Market System — estimates that at least $5


trillion have been shifted out of poorer countries to the West since
the mid-1970s. It is further estimated by experts that one per cent of
the world’s population holds more than 57 per cent of total global
wealth, routing it invariably through these tax havens. How much of
this is from India is anybody’s guess.

What is to be noted here is that most of the wealth of Indians parked
in these tax havens is illegitimate money acquired through corrupt
means. Naturally the secrecy associated with the bank accounts in such
places is central to the issue, not their low tax rates as the term
‘tax havens’ suggests. Remember Bofors and how India could not trace
the ultimate beneficiary of those transactions because of the secrecy
associated with these bank accounts?

But this piece is not about Western conspiracy. Rather it is all about
recovering out own wealth from these countries. And in this
initiative, for obvious reasons, one can expect absolute stonewalling
by our own government as well as foreign ones.

Naturally this has to be a public initiative — an initiative by you
and me, jointly ensuring that our government acts decisively. And in
this process there can be no place for any debate — either you are
with this initiative or against it.

Source: M R Venkatesh
15th April, 2008

http://indianblackmoney.com/PublicLoot4.asp

Swiss Bank Reveals Identity of Secret Money Accounts

Swiss bank accounts were long thought to be a safe place to hide
illegal money, far from the reach of tax authorities, vigilance and
financial regulatory authorities worldwide. Until UBS, the largest
bank in Switzerland, agreed to reveal names of Americans whom
authorities suspected of using offshore accounts to evade taxes.

The New York Times says

The bank admitted conspiring to defraud the Internal Revenue Service
and agreed to pay $780 million to settle a sweeping federal
investigation into its activities. It is unclear how many of its
clients’ names UBS will divulge. Federal prosecutors have been
examining about 19,000 accounts at the bank, but UBS ultimately may
disclose the identities of only a few hundred customers. But to some,
turning over any names at all heralds the end of the secret Swiss bank
account, whose traditions date to the Middle Ages.

The Wall Street Journal comments

The agreement marks the first time Swiss financial regulators have
allowed one of their banks to reveal the identity of account holders
normally held secret under centuries of Swiss banking tradition. Some
Swiss lawmakers have opposed the move, claiming it would destroy the
Swiss banking industry. Even before the U.S. agreement, many of the
world’s wealthy who have relied on Swiss banks have been spooked
enough to move assets to other jurisdictions, according to lawyers and
prosecutors.

Associated Press clarifies the issue further regarding banking secrecy
and confidential Swiss Bank Accounts

Merz, UBS and Switzerland’s financial regulator all insist that
Thursday’s handover is not a retreat from the principle of banking
secrecy because it concerns only a small number of files that are
linked to tax fraud — and not tax evasion.

Under a 75-year-old law, Swiss banking secrecy can only be lifted when
individuals are deemed to have deliberately defrauded tax authorities
as opposed to failing to declare all assets, a distinction only
Switzerland and other tax havens make. Banking secrecy “serves to
protect privacy,” Merz said. “However, it does not protect tax
fraudsters.”

This will surely hit the Swiss banking industry which thrived on the
very fact that hidden money could be easily, securely and secretly
parked away into Swiss bank accounts and with no fear that regulatory
or tax authorities from any country would be able to find the
identities of these Swiss account holders. Now no Swiss bank is safe…

Source : http://www.quickonlinetips.com/archives/2009/02/swiss-bank-reveals-secretmoney-accounts/
20th February, 2009

http://indianblackmoney.com/SwissBank9.asp

chhotemianinshallah

unread,
Feb 22, 2010, 9:11:45 AM2/22/10
to
Printed from Paradis Fiscaux: Inside the tax haven
Subodh Varma, TNN, Oct 10, 2009, 11.16am IST

As economies were sucked into the black hole of the recession last
year, the underbelly of the moneyed world suddenly found itself
exposed. The tax haven was under siege. Why should the big boys whose
greed had gutted corporations be allowed to laugh all the way to their
Swiss bank? The serpent of scrutiny slithered into the paradis fiscaux
(financial paradise , pronounced paradee fisco), and it has yet to
leave.

The immediate cause of the uproar against tax havens was fortuitous.
Bradley Birkenfeld, a banker with UBS (Union Bank of Switzerland),
blew the whistle on how this giant bank was helping US citizens evade
tax. Across the Atlantic, Heinrich Kieber, a computer programmer in
LGT, Liechtenstein's biggest bank, copied details of 1,400 clients
with 4,500 beneficiaries in 13 countries, put it on a CD and sold it
to the German government for 4.2 million Euros. More worms crawled out
of the woodwork and the tax haven vault soon split wide open.

So, what are these tax havens - aka tax shelters, offshore financial
centres (OFCs), secrecy jurisdictions? How have they evolved, how do
they work and how on earth does one get information from them?

Estimates of wealth salted away in these havens are difficult to work
out. After all, the whole point is to keep the money secret. But
several international bodies have done detailed calculations and come
up with eye-popping numbers. According to a report by the Washington-
based Global Financial Integrity (GFI) programme, about $11.5 trillion
is held in these havens. The economic significance of these hidey
holes can be gauged from the fact that over 60 per cent of global
trade is routed through them.

The GFI report provides a glimpse of where all this wealth is coming
from. It estimates that between 2002 and 2006, over $3 trillion flowed
into tax havens from the developing world. That's an average growth of
a staggering 18 per cent per year. India itself lost over $115 billion
during this period - Rs 1.1 lakh crore per year. To get a handle on
this staggering figure, try this for size: It's about three times the
money spent by the mid-day meal scheme over the last years to feed 120
million primary school children, and it's more than the country's
combined budget for health, education and internal security.

The most common reason for the existence of tax havens is that people
and corporations with huge amounts of wealth want to escape taxes. If
your money is stashed away in Switzerland or the Cayman Islands, you
could sleep easy. Tax rates are negligible or even zero and nobody -
not even governments - can pry into the details of your transactions
or account.

Tax Justice Network, an advocacy group, identified 69 tax havens
across the world. These include countries (like Switzerland and
Liechtenstein), dependencies and territories (like the British Virgin
Islands or Cayman Islands) and special zones within countries where a
separate legal system has been 'ring-fenced' to provide tax benefits
(like in New York or Malaysia). The Organisation for Economic
Cooperation and Development (OECD), a club of 30 rich countries,
currently lists 38 tax havens, leaving out small tax shelter
jurisdictions within larger countries. In addition, OECD has brought
out a list of 21 countries with potentially harmful tax regimes. An
IMF study, focusing only on those tax havens that provide financial
services, identifies 46 OFCs.

It is a common misconception that all of this money is crime-related .
Raymond Baker, who runs the GFI programme , estimated in 2007 that
global illicit financial flows amount to between $1.1 trillion and
$1.6 trillion annually . About 30 per cent is of criminal or corrupt
origin. The rest - $700 bn to $1 tn - is proceeds from commercial
abuses. Companies trading internationally often take recourse to
mispricing , transfer pricing and even fake transactions, generating
millions as illegal profits. These do not appear on their individual
books and can be located only by comparing accounts of all
independently held subsidiaries.

Alex Cobham of the Oxford Council on Good Governance conservatively
estimates that poorer countries lose $385 billion in revenues annually
due to tax evasion. Angel GurrÃa , OECD secretary-general , says,
"Developing countries are estimated to lose to tax havens almost three
times what they get from developed countries in aid."

Moreover, the huge concentration of mobile money in tax shelters is
also cause for instability in the financial system . It flows into
equity or derivatives markets when the pickings are good and flees
when better options are available elsewhere. That's not how good cash
should behave. But then, when have money and morals walked together?

http://timesofindia.indiatimes.com/articleshow/msid-5109068,prtpage-1.cms

HomeAboutArchivesContactContributorsFeatured PostsIs India a Poor
Country? Black Money, World Aid and The Coming Sovereign Crack Down of
Tax Havens
DK Matai - October 20, 2008

Dear Friends, as sovereign governments of major countries in the world
come under severe pressure to inject fresh funds in concert into their
financial institutions and national economies, their tax revenue and
customs departments are gearing up to crack down on private banking
tax havens at lightning speed.

In March 2005, the Tax Justice Network (TJN) published a research

finding "The Price of Offshore", demonstrating that USD 11.5 trillion
of personal wealth was held offshore by the rich and ultra rich --
High Net Worth Individuals (HNWIs) -- across the globe. This was based
on data from many consulting firms and financial institutions
including the Bank for International Settlements in Basel,
Switzerland. The findings estimated that a large proportion of this
wealth was managed from 70+ tax havens with Switzerland at the top of
the black money pyramid. The USD 11.5 trillion of assets held offshore
would generate a return of about USD 860 billion a year at a 7.5% rate
of return, and a consequent tax loss of USD 250+ billion for sovereign
nations, more than three times the OECD countries' official
development assistance to the entire world.

Surprisingly, India -- still regarded as a poor country by many -- has
USD 1.5 trillion in Swiss banks, which is more black money than the
rest of the world combined. This is thought to be unaccounted money
earned in India by inappropriate means as otherwise any Indian citizen
or corporation wishing to open a bank account abroad has to take
permission from the Reserve Bank of India and records do not show any
such permissions granted for deposits in Switzerland. A 2006 report of
the Swiss Banking Association claims Indians are the biggest
depositors of black money in banks located in Switzerland. Top five
countries in terms of such deposits are:

India: USD 1,456 billion
Russia: USD 470 billion
United Kingdom: USD 390 billion
Ukraine: USD 100 billion
China: USD 96 billion

With private account deposits of USD 1.5 trillion in foreign reserve
which have been misappropriated, an amount 10 times larger than
India's foreign debt -- USD 155+ billion -- one needs to rethink if
India is a poor country? Many Indians regard this money as public loot
since independence from Britain in 1947 and are asking, "Can we bring
back our money?" It is argued that once this huge amount of black
money and property comes back to India, the entire foreign debt can be
repaid immediately, still leaving a huge surplus amount of foreign
exchange reserves in India. Some 80,000 Indians travel to Switzerland
every year, of whom 25,000 travel very frequently. "Obviously, these
people won't be tourists. They must be travelling there for some other
reason," believes an official involved in tracking illegal money. And,
clearly, he is not referring to the commerce ministry bureaucrats who
have been flying in and out of Geneva ever since the World Trade
Organisation (WTO) negotiations went into a tailspin!

South Asia has been hit hard by the "The Great Unwind" because it is
an important part of the global economy which has caved in. Under
pressure from the West, India opened up several sectors in the last
two decades. However, it has been seen during the last few weeks that
the Western financial institutions, hedge funds and capital providers
have been the first to sell their shares in various Indian companies,
bringing the share market tumbling down. It is estimated that in India
alone the Western investors have been withdrawing USD 1+ billion in
foreign exchange per week as they experience margin calls, unwind
carry trades, and confront liquidity problems and greater hardship in
their originating countries.

The Swiss Banking Association's startling disclosure that Indians hold
USD 1.4 trillion of their USD 2.15 trillion black money deposits is
intensifying pressure on the Indian government to get access to that
money as global financial pressures intensify and there is this
accelerating flight of capital abroad. The well known economist
Professor Arun Kumar estimates black money generation in India to be
currently 50% of the GDP. The growth of black money in proportional
percentage to the GDP has shown an alarming increase in recent years,
from 20% in the 1980s to 45 - 50% at the turn of the century. It is


further estimated by experts that one per cent of the world's
population holds more than 57 per cent of total global wealth, routing

it invariably through tax havens. ATCA's preliminary investigation to
analyse the Swiss banking chain and to assess Indian wealth in that
single country, suggests that the number is much larger than the USD
1.4 trillion figure and is more likely to be near USD 3 trillion. The
larger figure can be derived from the deposits in vaults of gold,
diamonds and other precious gems alongside assets managed out of
Switzerland in other tax havens. There are some well known 'slush


parks' like St Kitts, Antigua, Bahamas, Isle of Man and Liechtenstein

that multiply such holdings manifold with the central management
points in Switzerland.

Raymond Baker, a US-based expert in illicit financial flows, in his
widely referenced book "Capitalism's Achilles Heel: Dirty Money and
How to Renew the Free Market System" estimates that at least USD 5
trillion have been shifted out of poorer countries to Western tax
havens since the mid-1970s. He estimated cross-border flows of global
dirty money in a range between USD 1.1 to USD 1.6 trillion annually,
about half of which came from developing and transitional economies,
and two thirds of which is commercial dirty money. In April 2007, the
World Bank endorsed Baker's figure. Using his lower USD 500bn estimate
for developing and transitional economies, Baker has said, "Through
most of the 1990s, aid was running at about USD 50bn a year from all
sources. It has edged up slightly in this decade. USD 50bn of aid in;
USD 500bn of dirty money out. For every USD 1 that we [the West] have
been generously handing out across the top of the table, we've been
taking back some USD 10 of illicit proceeds under the table [via tax
havens and other means]. There is no way to make this formula work,
for poor or for rich." The USD 500bn coming illegally out of
developing and transitional economies is equivalent to 8% of their
GDP.

In the 1990s, US Treasury department officials told Baker that illicit
inflows into the US stood at around USD 250 billion per year, and in a
good year they seized USD 250 million of that. This equates to a
failure rate of 99.9%. The volumes have increased since then, but
there is no reason to think that the failure rate has improved.
"Laundered proceeds of drug trafficking, racketeering, corruption, and
terrorism tag along with other forms of dirty money to which the
United States and Europe lend a welcoming hand," Baker concluded.
"These are two rails on the same tracks through the international
financial system." It is not possible to tackle any of these seriously
without tackling them all. Baker's opening speech at a recent
conference explains some of the issues in stark detail, "No one I have
ever talked to thinks dirty money is declining or that anti-money
laundering efforts are stemming the global tide of illicit proceeds.
Indicators point in the opposite direction." Baker broke down his data
like this:

Cross-border annual flows of Global Dirty Money -- Low - High

1. Criminal -- USD 331 - 549 billion
2. Corruption -- USD 30 - 50 billion
3. Commercial -- USD 700 - 1,000 billion

of which:

Mispricing -- USD 200 - 250 billion
Abusive transfer pricing -- USD 300 - 500 billion
Fake transactions -- USD 200 - 250 billion

TOTAL -- USD 1,061 - 1,599 billion

Experts point their finger at the new investment environment of the
last two decades which shunned state intervention and favoured massive
deregulation. The retreat of the nation state ensured that the
restraint exercised on capital to keep its greed in check was diluted
and some amount of the black money went into the process of being
legalised. They point out that in a free market environment takeovers
were much easier. Those who possessed black money tried to buy legal
businesses to gain legitimacy for their shadow wealth. The Great
Unwind has reversed this process. Watch out particularly for the
United States, Euro-zone countries, United Kingdom, China, India and
Russia in regard to the coming sovereign crack down of tax havens
worldwide.

[ENDS]

Posted by DK Matai at October 20, 2008 02:25 AM

Comments
Well, this is all so overwhelming!

What am I going to do now with my Buddha or Christ consciousness?

Guess am going to gather a lot of those colourful autumn leaves
and..... feel rich :)

1. Posted by heartphone on October 20, 2008 03:53 AM

The chick, hidden from view, asserted its self-regulating form within
a hardened shell, (Humpty Dumpty?)
All that was for it is now against it, shell or chick.
Chick, brimming with new life, knows just what to do with its beak.
Shell disintegrates back into Mother Earth.

Chick admires the autumn leaves ;)

2. Posted by Ed on October 20, 2008 04:19 AM

The figures are quite huge and overwhelming. What is the source of all
this data.........??If correct then something must defenitely be done
about this economoic drain. This basically means that the HNI's of
India are contributing to the swiss economy in a big way. And if we
have some law or bill in place which gives the same discretion and
security to these HNI's in India. They can park this huge money in
India itself. The capital interest earned would itself wipe off our
foreign debts in one year. Even if people do not want to part with
their black money they can contribute to the national economy by
parking it in their country.

3. Posted by Amit Tikoo on October 20, 2008 04:30 AM

And those leaves
dance at the moment
up and down to the ground
on the rhytm
of the wind

And me dancing with them
under the sunshine
In the Mood for
creating another labyrinth :)

4. Posted by heartphone on October 20, 2008 06:19 AM

The financial wiz sayeth, "the world runs on credit"!

No loan no life eh . . .

Great

5. Posted by empyrius on October 20, 2008 09:15 AM

It is so overwhelming. One wonders where in the world these funds are
invested? They can't be just sitting in the banks in Switzerland. If
they are invested then where? What about return on such investments?
Is it so difficult to get full disclosure of all such transactions? I
am confused.
Morris

6. Posted by Morris on October 20, 2008 11:11 AM

so much wealth, and still so much poverty... untill and unless the
soul detaches from the conciousness of scarcity... there will always
be poverty...

7. Posted by Nimita on October 20, 2008 12:52 PM

Well...I am sorry, but I could not get thru this post, as finance is
not my par-ta....but really?

I don't think that we can judge and I ask for justice with no target.
I don't know where justice will go, but I ask for justice, as all of
this has been so injust for so very long.

May Justice be done!

Justice!

I question you not.

Justice!

8. Posted by Char4 on October 20, 2008 10:21 PM

Dear DK,

I have read the article $Is India a Poor Country? Black Money, World
Aid and The Coming Sovereign Crack Down of Tax Havens$ with great
interest and horror.

I am afraid that in the article you have mixed couple of important
questions, namely:
- people keeping their assets in offshore territories;
- dirty money and money laundering, connected with crime and drugs.

I believe that so called "tax heavens" come to life not by an
accident
but as a result of an existing need to escape the Big Brother.
Considering the sad even often catastrophic record of governments
around the world seizing the assets of its citizens and destroying
their countries and economies, escape to such places is a natural
defense reaction of everyone who would not like to be slaughtered as
an defenseless animal in slaughterhouse.

Just 10 years ago I lived through a financial crisis and
hyperinflation caused by an incompetent government. We all suffered
and lost our savings. Only those who did not trusted the government
and kept some of their savings in foreign cash succeeded to retain
some of its money.

I really can not agree that with more government we will renew the
free market system. Actually what will happen is a government
financial dictatorship. I was born and grow up during the Communist
regime in my country. What some "experts" are proposing is something
I've been trough already and I don't like it. Neither everybody will
like it when it happens, but it will be a little too late then.

The right attitude and questions are:
- Why decent people are escaping to tax heaven?
Maybe because we have irresponsible and incompetent governments which
waste the money and resources of its citizens and the only way they
know to solve problems is increase of taxes and pouring money in
often
stupid and corrupt projects. What I am seeing in my country last few
years is that after drastically lowering taxes, the government
collected twice more money. So the proposed solution to crack on tax
heavens is not only counter productive but is stupid. If someone
really cherish free market economy maybe a better idea would be to
compete with tax heavens on taxes and sensible and responsible
economic policies.

- why the governments can not cope with the crimes which generate the
real dirty money?

Usually when governments can not solve a real problem, they start
doing other things to justify their existence. The big problem is
that
always it is on our expense.

Best regards

Victor Papazov

9. Posted by vpapazov on October 22, 2008 07:29 AM

http://www.intentblog.com/archives/2008/10/is_india_a_poor.html

Black-money debate: Cong terms BJP claim bogus
PTI, Apr 20, 2009, 12.50pm IST

NEW DELHI: The Congress on Monday invited the BJP to a serious debate
on black-money stashed abroad, while refusing to be drawn into
discussions on matters based on "bogus" sources.

"Capital flight from India is a serious issue and should be debated
seriously. But Mr L K Advani's data is very shaky and is based on
mostly bogus sources," Congress election coordinator and former Union
minister Jairam Ramesh told PTI here.

Advani, the BJP's prime ministerial candidate, had released a report
of the party's task force on April 17 that pegged Indian wealth in
Swiss banks and other offshore tax havens between USD 500 billion and
USD 1.4 trillion (more than the size of the Indian economy).

Ramesh said the Global Financial Integrity (GFI) report of the
Washington-based Center for International Policy was the only credible
source of information for the BJP task force. All other sources, that
Advani used to arrive at the capital flight data, are "bogus", Ramesh
said.

While the GFI report arrives at a figure of USD 100 billion for
"illicit financial flows" from India between 2002-2006, several Indian
economists Ramesh has interacted with on the issue suggest that the
report talked only about the gross outflows.

"If net outflows are matched with the capital account, there is a
negative net outflows," Ramesh said. The Congress election strategist
said even in the GFI study there are "very serious questions" on the
methodology.

Ramesh further said he asked GFI study author Dev Kar on the route
through which capital flight is taking place.

"He (Kar) said categorically that all this (illegal outflows) are
because of under-invoicing of exports and over-invoicing of imports",
Ramesh said.

The study covered the period 2002-2006 when "we had both the NDA and
UPA governments. What did BJP do then?" he added.

Besides, the Communist Party - Marxist which has committed in its
election manifesto a "drive to unearth black money, especially those
stashed in Swiss banks.." has also raised questions about the role of
the NDA government till 2004 in tackling capital flight.

CPM politburo Member Sitaram Yechury said on Saturday, the BJP task
force report quotes from a study by Washington based Global Financial
Integrity Project: "The GFI study shows that during the period from
2002 to 2006, annually USD 27.3 billions were stashed away from
India.

If this is true, then nearly USD 55 billion worth of illicit transfers
occurred in the two year period, 2002 to 2004, under the BJP-led NDA
government itself, in which Mr Advani was the deputy prime minister
and the home minister. What did he do to prevent such illegal
transfers when he was in power?"

http://timesofindia.indiatimes.com/India/Black-money-debate-Cong-terms-BJP-claim-bogus/articleshow/4424198.cms

http://www.gfip.org/storage/gfip/economist%20-%20final%20version%201-2-09.pdf

India & Black Money

GFI's latest report, "Illicit Financial Flows from Developing
Countries: 2002-2006," found total illicit financial outflows from
India alone to average from a low of US$22.7 billion to a high of US
$27.3 billion per year.

Illicit capital outflows has emerged as a major issue in this year's
election.

Additional Resources

►Read Raymond Baker's Financial Times Op-Ed, "India shows us the curse
of 'black money'"

►Read GFI Lead Economist Dev Kar's Indian Express Op-Ed, "What We
Actually Said"

►Read GFI's Release: Illicit Financial Outflows from India $22 Billion-
$27 Billion per Year

►Read GFI Lead Economist Dev Kar's Official Statement on Illicit
Capital Flight from India

http://www.gfip.org/index.php?option=com_content&task=view&id=230&Itemid=111

India shows us the curse of ‘black money’
By Raymond Baker
Financial Times
April 24, 2009

India’s opposition party leader L.K. Advani sparked a political
conflagration with pre-election campaign remarks that India was losing
tens of billions of dollars each year in illicit financial outflows,
or “black money”. He asserted that the National Democratic Alliance
would vigorously pursue recovery of these lost assets if voted into
power. With the rolling election now in progress, the issue of India’s
missing billions has grown progressively thornier, as both sides vie
to take the moral high ground.

Whatever the outcome of the election, India’s problem has broader
implications both for the developing world and for efforts by the
Group of 20 developed and developing nations to craft an effective
post-crisis economic plan for the global financial system.

In his discussion of black money, Mr Advani cited our estimates of
illicit capital flight, which suggest total illicit outflows from the
developing world of $1,000bn (€766bn, £684bn) a year. India ranked
fifth highest at $22bn-$27bn a year, coming in behind Russia ($32bn-
$38bn), Mexico ($41bn-$46bn), Saudi Arabia ($54bn-$55bn) and China
($233bn-$289bn).

Mainland China’s massive outflows were predominantly the result of
trade mispricing – a common practice whereby multinational
corporations manipulate figures on commerce and earnings to minimise
tax liabilities. A popular means of tax evasion for companies, trade
mispricing is the driving force behind most of the illicit capital
exiting developing countries.

Second-ranked Saudi Arabia and fourth-ranked Russia were exceptions to
the trade mispricing rule because of their status as oil exporters,
oil being difficult to misprice.

The proceeds of criminal activity, corruption and corporate tax
evasion, these flows are clandestine in nature and usually end up in
financial centres featuring low regulation and high secrecy. This
makes it tricky to study illicit financial flows.

India is the latest of several nations to raise the alarm about
illicit capital flight. Following high-profile scandals involving
Liechtenstein and Switzerland, the Group of 20 nations has demanded
greater co-operation in tackling the shadow financial system. Made up
of tax havens, jurisdictions allowing secrecy, disguised corporations,
anonymous trust accounts, fake foundations and assorted money-
laundering mechanisms, it is designed to move money and obscure its
sources.

What have thus far remained absent are the concrete reforms needed to
dismantle this shadowy network and enforce greater transparency and
accountability in the global financial system. The G20 is poised to
accept the Organisation for Economic Co-operation and Development
standard for exchange of tax information, a well-meaning but weak
approach to the problem. While the much-publicised post-G20
arrangements by several havens to sign tax information exchange
agreements are welcomed, these agreements are extraordinarily
cumbersome. The onus remains on the requesting nation to prove that
the information sought is “foreseeably relevant” to suspected crime or
tax evasion. Furthermore, havens and jurisdictions supporting secrecy
are not required to provide information they do not normally collect.
Under the OECD standard, all elements of the global shadow financial
system can remain in place.

What needs to happen now is for the G20 to broaden its dialogue on
information exchange agreements, inter­national co-operation and
international financial protocols. Most effective in curtailing the
massive illicit outflows from developing countries would be a
requirement for automatic cross-border exchange of tax information on
personal and business accounts and country-by-country reporting of
sales, profits and taxes paid by multinationals.

As world leaders and high-level stakeholders meet this weekend in
Washington, the question of India’s black money should be considered
as a sign of what lies ahead. The global recession is expected to have
a severe impact on developing economies and undo years of poverty
alleviation efforts and economic gains. The desire to offset this
predicted impact is sincere. But until efforts are made to dismantle
the shadow financial system and mandate more co-operative and rigorous
reporting, success will remain as elusive as India’s missing black
money.

India has shown that this issue resonates with voters. Politicians in
other developing country democracies would be wise to take note.

The writer is director of Global Financial Integrity

Copyright The Financial Times Limited 2009

http://www.gfip.org/index.php?option=com_content&task=view&id=205

What we actually said
Indian Express
April 30, 2009

By Dev Kar

Economists use two basic models to estimate illicit financial flows
(IFFs), also known as illegal capital flight. According to the first
method, if the source of funds (borrowing abroad and foreign direct
investment) is higher than recorded use, the excess must have leaked
out as unrecorded transactions and are therefore illicit by
definition. The second method tracks the over-invoicing of imports and
under-invoicing of exports by domestic residents in order to capture
their illicit holdings of foreign currency abroad. The Global
Financial Integrity (GFI) study estimated that black money to the tune
of $22.7-$27.3 billion left India annually during 2002-2006.

That issue, of black money leaving India, and the total stock of slush
funds held abroad by Indians, has become a hot-button political issue.
Unfortunately, in the political fray a number of commentators have
misinterpreted the GFI report and have confused the issues.

One of them simply took the unrecorded BOP part and depicted that
figure ($4.6 billion) as the lower end of the range of black money
outflows. Clearly, this is incorrect; the GFI range of $22.7-$27.3
billion includes both unrecorded BOP transactions, as well as trade
mispricing. Other commentators have taken this range and interpolated
them back to 1947 in order to come up with the total stock of slush
funds abroad. Such back-of-the-envelope calculations yield a highly
dubious figure, given the significant structural changes in both the
Indian and world economies since then. The opacity surrounding the
operations of offshore financial centres, tax havens, and on-shore
banks which hold these illicit assets mean that no one knows what that
stock of slush funds is.

A question was raised concerning calculating trade mispricing. As is
standard practice, the cost of freight and insurance was explicitly
accounted for; the main method of estimating black money outflows
through trade mispricing involved the calculation of trade
discrepancies using data reported to the IMF by its member countries.
In addition, the GFI study also utilised the IPPS system, measuring
trade mispricing based on deviations of the traded price against a
“world norm”. Estimates obtained through the two completely
independent methods were quite close. Another commentator opined that
trade reforms in India should have reduced the practice of trade
mispricing. Nothing shows that the two are linked. In fact, the
decline of import duties may well encourage import over-invoicing,
particularly if grassroots corruption and the related desire to
accumulate wealth abroad away from the reach of regulatory
authorities, are alive and kicking.

Another comment was that economists tend to cherry-pick estimates —
including outflows but ignoring inflows of black money. On the
contrary, ever since the trade mispricing model was put forward more
than 30 years ago, economists have taken account of all signs in
estimating capital flight from individual as well as small sample
countries. However, according to this “traditional” method, Africa
supposedly received $12.3 billion per year in black money inflows
during 2002-2006. This is an absurd result (because of Africa’s
continued dependence on much smaller external aid) leading us to
reject the “wrong sign” method. There is not a single study that
validates the nature and significance of illicit inflows; it is
possible that economists have therefore seriously understated the
issue of black money outflows from developing countries.

For instance we have seldom come across traders bringing in black
money through trade mispricing. The monetary impact would have been
noticed by the RBI. Hence, our premise was that black money doesn’t
just hide — it tends to flow out and away from reach. And once it
goes, it hardly ever comes back. Naturally; if tax cheaters and other
corrupt individuals have gone to great lengths to shelter their wealth
in secrecy, why on earth would they bring it back to the government’s
attention?

Note that the best economic models cannot capture all the ways to send
money out, a limitation we mention in the report. For instance, a US
State Department report estimates that hawala transactions in India
range between $13-17 billion annually. If so GFI’s estimates of
illicit flows from India are likely understated. Nor can economic
models capture a courier’s cross-border transfer of foreign exchange
in a suitcase. Thus we placed restrictions on the direction and size
of IFFs. Regarding the direction of flows, we ask — does the country
show illicit financial outflow (through the balance of payments) in
three or more years? The rationale is that a country with illicit
financial outflows in three or more years out of five cannot suddenly
turn around into a net receiver of black money. That would fly in the
face of how black money behaves in life. Regarding the size of
outflows, we ask whether a country’s illicit outflows exceed 10 per
cent of its exports, a volume that is much larger than what can
possibly be attributed to data issues.

As a result of this filtration process, GFI’s estimates are quite
conservative. Even so, illicit outflows have now come to outstrip
official development assistance by a factor of 10 to 1. The volume of
black money outflows from India is only the fifth or sixth highest
(depending upon the method of estimation) among developing countries.
We argue that if for every dollar in aid ten dollars leaves through
the backdoor, it is time that both donor and recipient countries adopt
policy measures to address the implications for poverty alleviation.
We can expect the outflow of black money from developing countries and
its absorption in the world’s shadow financial system to increasingly
grab the attention of both the public and the policy makers in the
coming years.

The writer is a lead economist at the Global Financial Integrity,
Washington DC and a former senior economist at the International
Monetary Fund

From the Indian Express

http://www.gfip.org/index.php?option=com_content&task=view&id=215&Itemid=72

Illicit Financial Outflows from India $22 Billion-$27 Billion per
Year
April 20, 2009

Monique Perry Danziger, 202-293.0740

Washington, DC - Global Financial Integrity issued a statement today
on its 2008 report “Illicit Financial Flows from Developing Countries:
2002-2006,” in response to growing interest in and citation of the
report’s estimates of illicit capital flight out of India, which is
ranked fifth out of 160 developing countries analyzed.

The statement reads:

"In December 2008, Global Financial Integrity (GFI) published a
research report titled 'Illicit Financial Flows from Developing
Countries: 2002-2006' which estimated total illicit capital flight
from developing countries to be as high as $1 trillion per year. The
report is based on analysis employing two main models of estimating
illicit financial outflows from developing countries based on the
World Bank Residual (based on change in external debt or CED) and the
Trade Mispricing (based on the gross excluding reversals or GER)
methods. During the period 2002 to 2006, total illicit financial
outflows from India average from a low of US$22.7 billion to a high of
US$27.3 billion per year."

Full statement available here...

“This is not just India’s problem,” said GFI director Raymond Baker.
“In 2006 total outflows from developing countries outpaced incoming
official development assistance (ODA) by a ratio of 10 to 1. This
means that for every $1 in ODA a developing country received, $10 was
lost due to illicit financial outflows. This massive loss of assets
is the greatest impediment to economic development and poverty
alleviation and should be of concern to all nations,” concluded
Baker.

The GFI report is based on examination of trade and external debt data
from 2002-2006 maintained by the International Monetary Fund and the
World Bank. Illicit financial flows are defined as the proceeds from


both illicit activities such as corruption (bribery and embezzlement

of national wealth), criminal activity, and the proceeds of licit


business that become illicit when transported across borders in
contravention of applicable laws and regulatory frameworks (most

commonly in order to evade payment of taxes). The report does not
link illicit financial flows with the underlying activities (whether
legal or illegal) that generated the capital to transfer abroad.

There is an Economist version of the report which contains a full
statistical appendix. The report is also available in Spanish and
French. To request additional information or to schedule an interview
with the report’s author, GFI lead economist Dev Kar, or GFI director
Raymond Baker, contact Monique Perry Danziger at 202-293-0740.

http://www.gfip.org/index.php?option=content&task=view&id=201

Official Statement by Global Financial Integrity

Statement by Global Financial Integrity on Illicit Capital Flight from
India as Presented in its December 2008 Report: Illicit Financial
Flows from Developing Countries: 2002-2006.”

In December 2008, Global Financial Integrity (GFI) published a
research report titled “Illicit Financial Flows from Developing
Countries: 2002-2006” which estimated total illicit capital flight
from developing countries to be as high as $1 trillion per year. The
report is based on analysis employing two main models of estimating
illicit financial outflows from developing countries based on the
World Bank Residual (based on change in external debt or CED) and the
Trade Mispricing (based on the gross excluding reversals or GER)
methods. The former estimates the gap between a country’s source of
funds and use of those funds—an excess of source of funds over its use
would imply an unrecorded or illicit outflow of capital abroad. The
latter model compares a country’s exports and imports (after
adjustment for the cost of freight and insurance) with the imports and
exports of the country’s trading partners; export under-invoicing and
import over-invoicing would represent ways through which a resident
could accumulate foreign exchange outside the country. Estimates of
total IFFs take account of both CED and GER channels of sending money
illegally outside the country. During the period 2002 to 2006, total
IFFs from India average from a low of US$22.7 billion to a high of US
$27.3 billion per year. The range of possible illicit outflows was
derived through a process of “normalization” whereby the lower end of
the range comprise of outflows that meet certain criteria while those
that are unrestricted set the upper end of the range. The report found
that the CED and the GER methods yielded the best unbiased estimates
of IFFs from the developing world. Other model estimates were rejected
because the resulting volume and pattern of IFFs from the developing
world as well as the country rankings yielded certain anomalies (such
as Africa being a net importer of IFFs).

All media inquiries and interview requests should be directed to
Monique Perry Danziger. Technical questions regarding the GFI report
should be directed to the report’s authors: Dev Kar, Lead Economist
or Devon Cartwright-Smith, Economist.

http://www.gfip.org/index.php?option=com_content&task=view&id=202

Official Statement by Global Financial Integrity

Statement by Global Financial Integrity on Illicit Capital Flight from
India as Presented in its December 2008 Report: Illicit Financial
Flows from Developing Countries: 2002-2006.”

In December 2008, Global Financial Integrity (GFI) published a
research report titled “Illicit Financial Flows from Developing
Countries: 2002-2006” which estimated total illicit capital flight
from developing countries to be as high as $1 trillion per year. The
report is based on analysis employing two main models of estimating
illicit financial outflows from developing countries based on the
World Bank Residual (based on change in external debt or CED) and the
Trade Mispricing (based on the gross excluding reversals or GER)
methods. The former estimates the gap between a country’s source of
funds and use of those funds—an excess of source of funds over its use
would imply an unrecorded or illicit outflow of capital abroad. The
latter model compares a country’s exports and imports (after
adjustment for the cost of freight and insurance) with the imports and
exports of the country’s trading partners; export under-invoicing and
import over-invoicing would represent ways through which a resident
could accumulate foreign exchange outside the country. Estimates of
total IFFs take account of both CED and GER channels of sending money
illegally outside the country. During the period 2002 to 2006, total
IFFs from India average from a low of US$22.7 billion to a high of US
$27.3 billion per year. The range of possible illicit outflows was
derived through a process of “normalization” whereby the lower end of
the range comprise of outflows that meet certain criteria while those
that are unrestricted set the upper end of the range. The report found
that the CED and the GER methods yielded the best unbiased estimates
of IFFs from the developing world. Other model estimates were rejected
because the resulting volume and pattern of IFFs from the developing
world as well as the country rankings yielded certain anomalies (such
as Africa being a net importer of IFFs).

All media inquiries and interview requests should be directed to
Monique Perry Danziger. Technical questions regarding the GFI report
should be directed to the report’s authors: Dev Kar, Lead Economist
or Devon Cartwright-Smith, Economist.

http://www.gfip.org/index.php?option=com_content&task=view&id=202

chhotemianinshallah

unread,
Feb 25, 2010, 7:12:21 AM2/25/10
to
Lt Gen Rath withdraws petition against his court martial
Agencies

Posted: Thursday , Feb 25, 2010 at 1221 hrs
New Delhi:

Lt Gen P K Rath, former commander of 33 Corps of the Army, on Thursday
withdrew his petition against his court martial in the Sukna land scam
from the Armed Forces Tribunal in New Delhi.

Giving reasons for the move, Rath's counsel Ajit K Singh said his
client withdrew the petition as the Tribunal has already ordered
reconvening of the court of inquiry (COI) in the case allowing Lt Gen
(retd) Avadesh Prakash, former Military Secretary, to cross examine
six witnesses.

"During the COI and the cross-examination by Prakash, we will also get
the opportunity to present our side. So, we will wait for the outcome
of the COI and then take further decision," he said.

Asked if the reconvening of the COI would delay court martial
proceedings against him also, Singh said, "Nothing can proceed until
the COI is over as we are also part of it."

He said if required, the petition can be filed again after the COI
proceedings in the case are over.

Rath's petition in the Delhi High Court, in which he had contended
that he had been singled out in the case and the "offence" against him
had been "prejudged", was dismissed on jurisdiction issue earlier this
month. Thereafter, he had moved to the Principal Bench of the AFT
here.

Singh said the petition before the AFT was on the lines of the one
filed by Rath in the Delhi High Court.

The Eastern Command, headed by Army Chief-designate Lt Gen V K Singh,
had initiated the COI against Gen Rath after the Cabinet Committee of
Appointments had approved his elevation as Deputy Chief of Army Staff,
Rath said in his petition.

The petition had said that the order to attach him to the Kolkata-
based headquarters just before he could take over as Army's Deputy
Chief was "highly discriminatory, arbitrary and hence bad in law."

"The attachment order has been passed with a malafide intention to
stop the petitioner from joining the post as Deputy Chief of Army
Staff (DCOAS)," he had claimed.

Rath, along with Lt Gen Prakash, is facing court martial in the case
that relates to no objection certificate being given by the army to a
private realtor to construct an educational institution on a 71-acre
plot adjacent to Sukna military base in Darjeeling.

http://www.indianexpress.com/news/lt-gen-rath-withdraws-petition-against-his-court-martial/584376/0

Induct Institutional Pride and Mantain Financial Rewards

By: Lt. Pratap Singh | Friday , 29 Jan '10 17:00:08 PM Reply |
Forward

CommentsPost comment22 Comments |Sukna LAND SCAM

http://www.indianexpress.com/news/sukhna-land-scam-army-chief-calls-for-admin/566475/

Sukna land scam: Rath claims ‘malafide’ intention
Express News Service

Posted: Thursday , Feb 18, 2010 at 0239 hrs

New Delhi:

Facing court martial in the Sukna land scam case, Lt Gen P K Rath on
Wednesday filed a petition in the Armed Forces Tribunal (AFT) alleging
there was “malafide” intention as the Eastern Command had initiated
action against him only after he was designated the Deputy Chief of
Army.

Rath’s counsel Ajit Singh said the petition filed on Wednesday was
along the same lines as the one filed in the High Court which had been
rejected it on the jurisdiction issue.

In his petition before the High Court here, Rath had contended that he
had been singled out in the case and the “offence” against him had
been “prejudged”.

The Eastern Command, headed by Army Chief-designate Lt Gen V K Singh,
had initiated the Court of Inquiry against Gen Rath after the Cabinet
Committee of Appointments had approved his elevation as Deputy Chief
of Army Staff, Rath said in his petition.

The petition had said that the order to attach him to the Kolkata-
based headquarters just before he could take over as Deputy Chief of
Army was “highly discriminatory, arbitrary and hence bad in law.”

http://www.indianexpress.com/news/sukna-land-scam-rath-claims-malafide-intention/581229/

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