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From: The Sharekhan Research Team [mailto:marketwatch
Sent: 20 April 2009 16:28
To: The Sharekhan Research Team
Subject: Sharekhan Post-Market Report dated April 20, 2009
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BS 18/4/09
Will use the money for public welfare, infrastructure projects.
Throwing up a serious issue of unaccounted Indian wealth stashed in secret banks and tax heavens across the world, the Opposition Bharatiya Janata Party (BJP) has promised to act on the menace within the first 100 days of the party forming the government.
L K Advani, BJP’s prime ministerial candidate who released the recommendations of a task force on the road map to bring the estimated $500 billion (Rs 25 lakh crore) to $1.4 trillion (Rs 70 lakh crore) of Indian money lying in Swiss banks and other tax heavens around the world, back to the country, also pledged to use the said money for public welfare and infrastructure projects.
The report was prepared by a panel comprising former Intelligence Bureau chief Ajit Doval, S Gurumurthy, Dr R Vaidyanathan from the Indian Institute of Management, Bangalore, and lawyer Mahesh Jethmalani.
Releasing the panel’s “interim recommendations” in Mumbai, Advani said that the Congress was taking the issue lightly though the Western nations, led by Germany and the US, had launched a virtual crusade against the Swiss banks and 50 other tax heavens after discovering that secretly stashed funds were even being used by terrorists. The BJP, he said, would send the report of the task force to US President Barack Obama, German leaders as also to the leaders of various political parties on the country.
Taking a veiled dig at the Congress, Advani said most of the money from India had been taken to the tax havens in the times of the Nehruvian socialist regime which had imposed high taxes. He alleged that later, the Indian money reaching these tax havens came from the kickbacks in various defence and other deals between the government and the firms.
The task force recommended that the government make tough domestic laws against the Indian clients of the secret banks. India must play a proactive role in the global efforts to coerce the governments of the tax haven countries to end secrecy in banking, Advani said.
More importantly, the panel seeks raising a strong public opinion on the issue, which could force the government to act against the operators of illegal monies. The report cites the example of British Prime Minister Gordon Brown, who, due to public pressure, had to reverse his stand against acting on tax havens in the Berlin G-20 meeting.
The BJP, which has made the Indian money in tax haven a key issue in its media campaign and the party manifesto, has decided to launch opinion polls on this in states ruled by the party. Gujarat has already launched it.
Advani today wondered why the United Progressive Alliance (UPA) government did not ask the German government to provide the details of the Indian names from the LGT bank’s secret records, which Berlin had managed to get. The BJP, if voted to power, would send a special emissary to Germany to get details of Indian names in the LGT bank’s secret records, he said.
The BJP leader also criticised Prime Minister Manmohan Singh for not “joining the protocol than raising this key issue from Indian perspective’’ at the recent G-20 meet at London.
The report has also asked the government to appoint a special ambassador with adequate knowledge of tax havens and secret banking issues to work with the G-20 specifically for framing India-friendly rules. It says unless New Delhi joins the global initiative to prove its seriousness.
