As per the PTI report, because of illicit cash flow due to tax evasion, corruption and other vices, India has lost a whopping USD 462 billion post its independence said a report and advocacy group.
The report named ‘The Drivers and Dynamics of Illicit Financial Flows From India” which was released by the Washington Based Global Financial Integrity (GFI) stated that the faster rates of economic growth since the economic boom (from 1991) paved way to deterioration of income distribution which led to the illicit flows.
The illicit income inflows were due to the crimes like tax evasion, bribery, corruption, etc maintained the report.
Raymond Baker, director of the GFI, said “This report puts into stark terms the financial cost of tax evasion practises in India.”
The report further said, “Present value of India’s total illicit financial flows (IFFs) is at least $462 billion. This is based on the short-term US Treasury bill rate as a proxy for the rate of return on assets. India’s aggregate illicit flows are more than twice the current external debt of $230 billion.”
The author of the report and chief economist of GFI, Dr. Dev Kar, said “’In this report we clearly demonstrate how India’s underground economy is closely tied to illicit financial outflows.”
Almost three-quarters of the illicit assets comprising India’s underground economy – which has been estimated to account for 50 per cent of India’s GDP (approximately USD 640 billion at the end of 2008)- ends up outside of the country. Dr. Kar said.
This is one of the reasons why the gap between rich and the poor in India is widening further.
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