Modiji’s promised Rs. 15 lacs, that never was

The reality is that the election promise of Rs.15 lacs was made by Mr Modi, in the heat of election campaigning and there was little truth behind it.

The most catchy and memorable election slogan of Mr Narendra Modi in the 2014 elections, was his promise to bring back to India, its black money stashed abroad, which he said would result in a windfall gain of Rs.15 lacs per Indian. It was riding on such attractive slogans that he came to power, but when it proved to be an empty promise, it also got him tonnes of criticism and the harsh derogatory tag of feku, by his many critics. This slogan then caught the instant imagination of the voters because it spoke about a chronic sore issue viz. the illegal loot of neta, bania and the babu, secretly parked abroad. Billions of dollars from India had been illicitly remitted abroad for decades since independence and were stored in secret bank accounts and assets abroad. A lot of it represented black money of tax evaders, but most of it was proceeds of crime of corruption belonging to babus and netas. So huge was thought to be the amount of such funds parked abroad, that it was said that the prosperity of countries like Switzerland was due to our money and that if these funds were brought back, it would resolve India’s problem of infrastructure deficit.

While it was always known that Indians had stashed billions of dollars abroad, for obvious reasons there were no accurate estimates available of this loot. All that was popularly known and correctly so was that tax havens like Switzerland, Liechtenstein, Luxembourg, Bahamas, BVI etc. were loaded with such Indian money. No foreign bank was willing to part with any details of such accounts and the answers given in the Parliament were thus a farce. It suited the then ruling party the Congress, to play it down as if there was very little stashed abroad and for the BJP, then in the Opposition, to exaggerate and sensationalise it. While in the Opposition, the BJP claimed that over 1000 billion dollars of Indian money was illegally parked abroad, but once in power, it sang a different tune, to say that it was just a few thousand crores of rupees. What a huge about turn. But when the HSBC leaks, Panama paper leaks etc. occurred and a large number of Indians were found to have secret accounts and assets abroad, it was clear that political parties were simply lying and were playing down the extent of the problem.

So coming back to the issue, Mr Modi did go hunting for the black money parked abroad, when he came to power. Numerous voluntary disclosure scheme weres announced in succession, new laws were enacted and existing tax laws were made far tougher to unearth such money and penalise the violators. India also signed tax information sharing treaties with dozens of nations for sharing information related to hidden accounts and assets abroad, but little success was achieved and forget the Rs.15 lacs per person, just a few hundred rupees of black money per Indian perhaps came back to India, due to these efforts by his government.

The reality is that the election promise of Rs.15 lacs was made by Mr Modi, in the heat of election campaigning and there was little truth behind it. The emerging fact is that there is no Indian money of such magnitude lying abroad as would get Rs.15 lacs per person, even if India succeeded in getting back all of it. As per estimates of three think tanks commissioned by the government, the maximum Indian black money abroad could be between USD 384 bn to USD 490 bn, which translates to an average sum of merely about Rs.23000 per Indian as against the claim of Rs.15 lacs per person. It is also estimated that just about an average of 5% of India’s black money lies abroad, with the rest in India itself. And even if India chooses to pursue the recovery of this sum, it will not be easy. Tax havens are not willing to part with these huge funds, for fear of losing their own prosperity and neither are individuals interested in being penalised and losing such funds. For example, while Switzerland had agreed to share information with India, it has refused to share information of a period prior to April 2011, when most of such wealth was illegally parked abroad. Thus there is denial, litigation, non-co-operation by banks and countries, disputed claims, overlapping tax laws etc. that make it impossible to bring back such sums to India, which Mr.Modi was perhaps not aware of when he made this popular election promise. This election is therefore silent about this 2014 promise, now buried in the annals of political jumlas.