DNA Edit: Swiss knife

In a development that can send black money hoarders in India scurrying for other safer havens, the Swiss government has notified the automatic exchange of information relating to financial accounts with India.

The implementation of this plan will commence from 2018, and the first tranche of data will be exchanged in 2019. Bringing back the massive quantum of black money that has been covertly stashed abroad has been one of the major poll planks for the Narendra Modi government.

This is a significant shot in the arm for the NDA government, which, from the very beginning, has kept its sight trained on bringing back funds that were illegally ferreted out of India. Once the provisions of this data-sharing pact kick in, the long-thriving era where there was little or no counter check on money deposited in Swiss banks will come to an end.

While critics can argue that the initiative has taken a long time to come, the silver lining is that the change has finally happened, a development that did not see the light of day under the UPA regime.

Now, the focus should be on establishing data-sharing pacts with other tax havens as well. As per an estimate by Arun Kumar, author of Understanding the Black Economy and Black Money in India, the black economy in India possibly stands at 62 per cent of the Indian GDP. The total quantum, he says, has risen from 40 per cent in 1995-96 to its current levels. Although data sharing will start in 2019, it will, for once, eliminate further scope of tax evasion.