By K.N. Pandita
We are fortunate in having an upright judiciary in our country that protects the rights of people and ensures the sovereignty of the state. In times when civil society drifts into aberrations that are obnoxious to the health of the state, the judicial structure, when approached, does the rescue exercise and ensures that the country keeps on right track. This is one of the great boons of democratic dispensation.
There are many memorable and historic pronouncements made by the Supreme Court from time to time that have reset the direction of the course of events. History will record these corrective initiatives in laudable terms.
Recently, the Supreme Court made one such pronouncement that will have far reaching impact on the economic and moral health of the country. In fact the matter of recurring corruptions was under discussion at the apex court when it said that there should be no reason for the government not to disclose the identity of persons and organizations that have stashed big monies in foreign banks.
For many years, we have been hearing that huge Indian money is being deposited in foreign banks to evade taxes and to misuse it even for political and anti-national purposes. The matter came up prominently after the Bofors episode was revealed. But despite public demand with support from the parliamentarians, the governments of the day were reluctant to open the subject for discussion for reasons of their own. Thus meaningful comments of those episodes were evaded skillfully. This gave rise to doubts that the governments were under pressure from political heavyweights and for political reasons it just adopted an evasive and lackadaisical attitude.
In particular, various Swiss banks were mentioned in whose vaults enormous monies coming from Indian individual or company depositors were deposited. Under Swiss law the banks of Switzerland are not bound to disclose the names of depositors or details about their identity or the quantum of their deposits. Taking shelter behind this provision, many Indians, individuals as well as companies, are reported to have transferred huge amounts running into billions of dollars to these banks.
This has been done to evade many irritating questions which the law of the land would raise, like the source of the huge income, the amount of tax paid, or not paid or the details of the funds expended. After all, whether the stashed money was earned legally or illegally, the fact is that it is the country’s money and part of national wealth, which has to be utilized or transacted within the country so that the people of the country receive its benefit in one way or the other.
Switzerland has been considered the safest place where undisclosed money can be deposited after taking it out of the country. For quite some time, even western countries and the US have not been feeling comfortable with the banks secrecy law of Switzerland. For example, the US and Germany have been able to repatriate big chunks of their monies stashed in Swiss banks. As these countries were faced with economic recession in recent past, the governments concerned had to take some steps to regain country’s economic health. This forced the Swiss government to revise its long kept rule of not disclosing the assets of foreign depositors in various Swiss banks. Swiss government’s presumption that the money from different countries stashed in their banks could not be brought under review cannot stand the test of time. It has also to be stated that the Swiss government itself has been finding that the law of non-disclosure of foreign deposits makes its position somewhat embarrassing. A few years ago, a case came up in a Swiss court in which a person claiming to be the legal heir to the deposits of a deceased German Jewish couple’s money in a Swiss bank. The case was thoroughly debated in the Swiss media, and under public pressure and relevant international covenants, the Swiss government was forced to revise its banking rules in part. This broke the jinx and thereafter no Swiss bank could guarantee the promised secrecy to a depositor.
Nearer home, before the 2009 Lok Sabha polls, the BJP had created a task force, and Vaidyanathan who was a member, gave examples of how much money was stashed in foreign banks. Global Financial Integrity, an international group published a small booklet and estimated the Indian money abroad at Rs. 20.85 lakh crore, There was a time when NDA raised the issue, but the Congress reacted by saying no country would change laws for us It asked how would they give us back the money. But it is the money of our country and our countrymen. Why should a countryman or a national organization take money out of country when we have one of the world’s finest banking systems? Why should not this huge money be spent on national development plans and programmes and help our people improve their living standards?
Those who have taken out enormous money and deposited it in foreign banks have committed not one but two crimes. Firstly they have betrayed the nation by not trusting its financial and commercial institutions, and secondly they have proved anti-national by depriving the nation of the benefit of economic and social development. They got the money in the country, legally or illegally is not the question, and as such, it is national wealth which cannot be squandered at their sweet will. The sources of raising huge credits have to be investigated into because that is in national interests and the country would not want to be handicapped for want of resources.
This all makes a good case for investigation and proper action by the government. The question of whether the names of persons who have stashed away the money should be made public or not is not as important as is being projected by the media. Once the government decides to repatriate the money, all details will follow and become public, and the government cannot hide it. The fundamental question is that the government or the parliament should take a decision about how to deal with this sort of situation. Maybe new financial rules will have to be framed and implemented or existing rules might need to be modified. This is a national issue and one fails to understand why political parties should make it an issue between them. The finance minister has to come out with a policy statement and convince the nation that its assets are safe and well preserved. It may also be said that the United Nations has passed a Convention on corruption and now laws are being drafted for the repatriation of money.