Black money: Stung Manmohan Singh puts Pranab Mukherjee on damage control job

The prime minister, however, made it clear that there was “no instant solution” to bring back black money.

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A day after the Supreme Court slammed the government over black money stashed away in tax havens abroad, prime minister (PM) Manmohan Singh sounded a note of urgency in the matter, asking finance minister Pranab Mukherjee to take appropriate steps.

The prime minister, however, made it clear that there was “no instant solution” to bring back black money. He also said information with government cannot be made public due to treaty obligations. “We have some information and that is being utilised to collect taxes,’’ he added.

At the cabinet meeting on Thursday, Singh expressed concern that the government was being made to look on the defensive on the black money issue. Other ministers felt that an impression was going around that the government had something to hide.

A senior official in the prime minister’s office said the prime minister felt the case was not properly put before the court. India has already signed agreements and treaties with more than 80 countries, including 10 tax heavens, to share information about tax evaders.

The government has initiated action against 18 Indians who had deposited money in Liechtenstein’s Bank in Germany. As per the records sent by the German authorities, the money amounted to Rs43.83 crore only.

The Liechtenstein’s head of the state, Prince Alois, had visited India in November last year and declared that his country was not a tax heaven after signing a global treaty with the OECD (Organisation for Economic Co-operation & Development).

Mukherjee is understood to have apprised the meeting that his ministry has set up income tax units in Mauritius, Singapore, Cyprus, Germany and half-a-dozen other countries to obtain information. The Indian government has also signed double taxation avoidance agreements with 80 countries, including UAE, Libya, Luxembourg, Swiss Confederation and all major countries, besides entering into negotiations for signing tax information exchange agreements (TIEA) with the Bahamas, Bermuda, British Virgin Islands, Isle of Man, Jersey, Monaco, Caymans Islands, St Kitts and Argentina.

The prime minister felt that the finance ministry should take prompt steps to inform the country adequately on the issue.

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