As per the recent Global Financial Integrity study by Dev Kar and Devon Cartwright Smith, of 2006, the average amount stashed away from India annually during the period 2002 to 2006 was about One Lakh Thrity Six Thousand Four Hundred and Sixty Six Crores. Mind boggling isn't it? So over the said period a total of Six Lakh Eighty Two Thousand Three Hundred and Thirty Crores was stashed away at various places all over the world, including Swiss Banks. Mind fails to comprehend the enormity of the situation.

Since this is not a new phenomenon and it has been on since Independence it is estimated that over Rs. Seventy One Lakh Crore was stashed away over the 55 years prior to 2002 - 2006 (the period considered in the above mentioned report). That is, 71 followed by an insanely large number of zeroes.

The financial transactions that were considered in this report included proceeds from illicit activities like corruption, embezzlement of national wealth, criminal activity, etc., and proceeds of business that has been transported across borders to circumvent applicable laws and regulations.

There are several methods by which money is stashed away at far off places. Like, under or over invoicing of exports and imports and stashing away the balance at foreign locations. Bribes and kickbacks in various defence deals or civilian contracts is another such method. Transactions that are done abroad but that are not reported here. People refusing to bring the earnings made abroad. Hawala transactions. Besides these methods there appear to be many more methods.

This money, stashed away at various tax havens, is lying about in bank vaults, rotting. If it were to be brought back to India, by hook or by crook, then the state of Indian Economy will undergo a sea-change. So much so, that India will no longer remain a land of poor but will be catapulted to become one of the richest nations in the world!

Source : This Interview of Prof. R. Vaidyanathan, IIM Bengaluru.