The main issue is Indian black money in Swiss banks

It is heartening to note the overwhelming response to the fast undertaken by Anna Hazare at Delhi on the issue of corruption and the Jan Lokpal bill. There is a groundswell of public opinion in his favour since ordinary citizens face the problem of corruption on a day-to-day basis.

It is womb to tomb (birth certificate to death certificate) operating procedure for every Indian. But in the midst of this euphoria, we should not lose sight of the Gangotri of corruption, namely, the black money kept by Indians in Swiss banks and in over 70 such havens.

Domestic black money is a vote of no-confidence in our government whereas black money kept in Swiss banks is a vote of no confidence in the Indian society and country and tantamount to treason. The quantum of illegal funds parked abroad across the world by Indians is estimated at least half a trillion dollar. And of the (Swiss franc) CHF2.8 trillion in Swiss banks, about CHF1 trillion is black money, according to Konrad Hummler, chairman of the Swiss private bankers association (see Swiss Review, August 2009).

In August 2009, CHF1 was nearly the same as US $1. This means there is about $1 trillion of black money in Swiss banks. My studied estimate is of this black money, India’s share could be at least $200 billion, or nearly Rs10 lakh crore, which amounted to 15% of India’s GDP in the last financial year.

That is the reason why Swiss media persons visited Jantar Mantar; to find out how much of this anti-corruption movement will shake their empire. There is a sudden spurt in visits by Swiss ministers and delegations to India, all of whom give interviews, the “openness” of the Swiss system and their willingness to share information provided the Indian government gives them concrete evidence.

Switzerland should be ranked as the no 1 country in corruption in the Transparency International index, but criminality is never associated with white people.

This should be Anna Hazare’s main demand: bring back the illegal wealth of India.

Curiously, Hazare’s fast and associated events are partly supported by members of the National Advisory Council (NAC) that jholawala cabinet without accountability. In other words, the NAC is running with the hares and hunting with the hounds, making the PM as the culprit while as NAC is projected as the “people’s cabinet”.

But this game cannot continue since illegal wealth abroad is an issue that will come into focus sooner or later. That, in turn, will shake the edifice of the carefully and craftily formulated agenda of NAC, because it believes that all the cases on 2G/Hasan Ali will be hidden under the Jan Lokpal Bill.

The bill is important but more important is the implementation of any bill. We have enough powers as of now with the government to bring the culprits to book and give exemplary punishment. But the ruling class is unwilling since politicians, bureaucrats, business magnets, sports people, Bollywood stars — everyone is a part of the system perfected over decades to siphon funds from India to tax havens.

Let us definitely have the modified Lokpal bill but let us not forget the main issue, namely, money in Swiss banks. It is the wealth of mother India and should be brought back. Anna Hazare should demand a parliamentary act declaring all illegal wealth of India kept in foreign banks as belongs to the Government of India. Once this is done, other countries cannot refuse information to us.

From February 1, 2011, Switzerland enacted a law for the restitution of illicit assets of politically exposed persons. This act enabled Switzerland to freeze the assets of Gaddafi and his family. This act will be enforced the moment India passes a law nationalising all assets held by Indians abroad. Second, let the government file a general purpose FIR on the illegal wealth — as was done in the case of Punjab terrorists — and as and when the Hasan Alis crop up, then take it up under the general FIR with other countries.

Let us not forget Swiss loot in the midst of all these NAC-created drama in which a genuine person like Anna has been caught. One only hopes that he does not become part of a famous category enunciated by Lenin as “useful idiots”.

The author is professor of finance, Indian Institute of Management-Bangalore. The views expressed are personal