$ 128 billion siphoned out in a decade
$128 billion siphoned out in a decade
Subodh Varma | Dec 26, 2011, 05.51AM IST
Even as the country continues to witness a campaign for a strong anti-corruption watchdog, a report has calculated that between $104 billion and $128 billion (roughly Rs 5 to 6 lakh crore) was illegally siphoned out of India in the decade spanning 2000 to 2009.
This works out to an average outflow of about $10-13 billion (Rs 48,000 to Rs 63,000 crore) every year.
The report has been prepared by international watchdog Global Financial Integrity (GFI), which first collected and computed worldwide data on illicit financial outflows in 2008.
International watchdog Global Financial Integrity's (GFI) report on illicit financial flows says nearly Rs 6 lakh crore was illegally siphoned out of India in the decade spanning 2000 to 2009.
GFI estimates illicit flows by looking at data on two aspects of the economy. The first category is calculated by comparing foreign funds generated by external borrowings and foreign direct investment with the uses to which these funds could be put - bridging the country's current account deficit or adding to its forex reserves.
If the official data shows that the use is less than the funds generated, there must be an illicit outflow and if it is more there must be an illicit inflow. GFI data shows that in India over $6.8 billion (about Rs 33,000 crore) was lost in this manner over the decade.
The second category is illicit flows that arise through trade mispricing. If an importer declares a higher import value to the customs department than the value of goods recorded by the exporting partner country, it creates an illicit outflow.
Similarly, if an exporter understates the value of goods actually exported in relation to the imports recorded in the importing partner country and keeps the balance of funds abroad, that too is an illicit outflow. International trade data reveals such mispricing by comparing data from partner trading countries.It is this type of jugglery that accounts for the bulk of illicit flows in India - worth over $121.65 billion (Rs 5.8 lakh crore) or almost 95% of the total.
$128 billion siphoned out in a decade - The Times of India
