The PM, however, hinted at the fact that his government was working on restructuring of tax laws to try and keep black money from flowing out of the country.
Taking a major swipe at the opposition parties clamouring for the “return of black money”, prime minister Manmohan Singh on Friday rejected any quick solutions to the problem.
“I am no astrologer and I don’t even know the magnitude of the black money lying around and I am not sure that we have the mechanism to bring the money back,” Singh said as the G20 summit in Cannes began to wind down after nearly two days of intense deliberations.
While the communique; issued by the G20 leaders endorsed the need for “increased banking transparency and exchange of information to combat tax fraud”, Singh was more circumspect and refused to bite BJP leader LK Advani’s baiting. “We are dealing with sovereign countries and they will cooperate with us only to the extent their laws allow them and so this is a work in progress,” he said.
The PM, however, also hinted at the fact that his government was working on restructuring of tax laws to try and keep black money from flowing out of the country.
“We have to create a structure that gives people the incentive to bring back the money. (This is) the only secure and long-term method to discourage the flow of money abroad,” Singh said, indicating that a new regime or policy could be on the cards on the issue.
He also took a strong line on the reduction in subsidies to bring about a better fiscal deficit in the economy. “Money does not grow on trees and we have to maintain a fiscal deficit of 4.6% as envisaged in the budget. There may be slippages but we have to cut expenditure and some subsidies. That is the only way to do it.”
Besides the domestic political compulsions, the overall G20 summit was not as promising as it was hoped to be for the PM. His bilateral meetings with French president Nicholas Sarkozy never took place on either of the two days. On Wednesday, a meeting was scheduled, but Sarkozy’s meeting with Microsoft founder Bill Gates took so long that the Singh had to cancel it. Thursday also offered little time for both the leaders to meet up.
The other scheduled meeting with the European Union and European Commission leaders also failed to come through. However, Singh did manage a few minutes with German chancellor Angela Merkel and Chinese president Hu Jintao.
But there were a few positives of the meet and India’s role in a larger construct. An imminent Greek tragedy was deferred with the promised referendum being put away by the Greek government after facing heat from the G20 leaders.
India’s position that the IMF play a role in helping the Eurozone and, in turn, Greece received the support of its partners from the BRICS (Brazil, Russia, India, China, South Africa) countries.
India’s efforts along with Canada to bring about a mutual assessment process that will allow greater alignment of economic and fiscal policies among the G20 nations also saw considerable progress.
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