Modi Government Constitutes SIT to Recover Black Money from Abroad

Prime Minister Narendra Modi

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Washington, DC – The newly elected Indian government under Narendra Modi on Tuesday (May 27) nodded to the constitution of a Special Investigating Team (SIT) to implement the recent decision of the Supreme Court, the highest legal body in India on large amounts of money stashed abroad by evading taxes or generated through unlawful activities.

Justice M.B. Shah, former Judge of the Supreme Court and Justice Arijit Pasayat, former Judge would head the SIT as Chairman and Vice Chairman respectively.

“The SIT has been charged with the responsibility and duties of investigation, initiation of proceedings and prosecution in cases of Hasan Ali and other matters involving unaccounted money. SIT shall have jurisdiction in the cases where investigations have already commenced or are pending or awaiting to be initiated or have been completed,” said a government press release.

“SIT will prepare a comprehensive action plan including creation of necessary institutional structure that could enable the country to fight the battle against unaccounted money. The SIT should report to the court the status of work from time to time,” the release added.

The Indian economy suffered $1.6 billion in illicit financial outflows in 2010, capping-off a decade in which the world’s largest democracy experienced black money loses of $123 billion, according to a report by Global Financial Integrity, a Washington-based research and advocacy organization.

“While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows,” said GFI Director Raymond Baker. “Much focus has been paid in the media on recovering the Indian black money that has already been lost. This focus is for naught as long as the Indian economy continues to hemorrhage illicit money. Policymakers and commentators should make curtailing the ongoing outflow of money priority number one,” urged Baker.

“$123 billion is a massive amount of money for the Indian economy to lose,” said Dev Kar, GFI Lead Economist and co-author of the report, adding, “It has very real consequences for Indian citizens. This is more than $100 billion dollars which could have been used to invest in education, healthcare, and upgrade the nation’s infrastructure.”

“In the first Cabinet of the new government…in the light of the directions of the SC, we have constituted an SIT for unearthing black money… This was an important issue for us,” Law and Telecom Minister Ravi Shankar Prasad was quoted as telling journalists after a one-and-a-half-hour long Cabinet meeting.

The Supreme Court, had recently criticized the former Congress-led UPA ( United Progressive Alliance) government for its failure to respond to its directive given on July 04, 2011 and called it contempt of court. In 2011 the Supreme Court had appointed a Special Investigation Team, headed by former apex court Judge BP Jeevan Reddy, to check in bringing home of black money to India. However, on July 06, 2011 Congress had invalidated court’s order on SIT, calling it an example of judicial overreach over the executive functioning and regarding it as inappropriate.

The incoming law minister Prasad stressed that immediate setting up of the SIT by the new Modi government, “indicates the commitment of the new government to pursue the issue of black money.”

The other members of the High Level Committee are:

i. Secretary, Department of Revenue

ii. Deputy Governor, Reserve Bank of India,

iii. Director (IB),

iv. Director, Enforcement

v. Director, CBI

vi. Chairman, CBDT,

vii. Director General, Narcotics Control Bureau

viii. Director General, Revenue Intelligence

ix. Director, Financial Intelligence Unit

x. Director, Research and Analysis Wing and

xi. Joint Secretary (FT&IR-1), CBDT

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