Black-money debate rages; Cong terms BJP claim bogus

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 LK Advani's data is very shaky and is based on mostly bogus sources," Congress Election
Coordinator and former Union Minister Jairam Ramesh said.

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.

CPI-M Politburo Member Sitaram Yechuri 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?."