About Rs 45 lakh cr of black money stashed abroad: Ficci

India could become a fiscal surplus nation if the govt manages to bring back at least 1/10th of the estimated Rs 45 lakh crore black money back into the country

Press Trust of India / New Delhi Jul 09, 2012, 19:13 IST

India could become a fiscal surplus nation if the government manages to bring back at least one-tenth of the estimated Rs 45 lakh crore black money stashed abroad, industry body Ficci said today.

Indian economy, currently grappling with slowdown, is likely to post a fiscal deficit of Rs 5.13 lakh crore or 5.1% of the GDP in the current financial year.

In a 12-point agenda to revive the economic growth, Ficci said that as per estimates, total black money stashed abroad is about Rs 45 lakh crore which is about 50% of India's GDP, and is nine times the size of India's fiscal deficit.

"It is estimated, even if 10% of such black money is brought back to the system, India can generate a fiscal surplus," it said.

The chamber, however, did not specify how the Rs 45 lakh crore black money estimate has been arrived at.

The government has maintained that there is no reliable information about the money of Indians in undisclosed bank accounts outside the jurisdiction of the country.

It has tasked three institutes -- NIPFP, NIFM and NCAER -- to conduct separate studies to estimate quantum of black money both inside and outside the country.

Ficci also urged the government to address the issue of repatriation of black money to immediately mitigate the Balance of Payment (BoP) situation by entering into global revenue sharing agreements.

The government's White Paper on black money alludes to a scheme whereby some Governments between themselves have entered into administrative agreements for revenue sharing.

It also said that to ensure the growing menace of black money is "curtailed in the future", it is suggested that tax incentives should be given for encouraging use of debit, and credit cards as these lead to audit trails.

The chamber also said introduction of GST will also help in curbing black money and demanded early implementation of the proposed indirect tax regime.

In the 12-point agenda, it further said Ficci believes the government can immediately push through policy reforms (like in FDI retail and aviation) in  in areas outside the ambit of the Parliament.

 It also pitched for a fiscal stimulus for investments across sectors and easing of the monetary policy by the RBI.

Other suggestions include deregulation of diesel prices; fast-track implementation of critical policies and projects like National Manufacturing Policy; productivity increase and agriculture marketing reforms and strengthen of frameworks for raising funds for infrastructure financing.

Ficci also said that the land acquisition bill should not be passed in its current form as it would raise the project cost by about 40%.