As per the report titled ‘Status of Unaccounted Income/Wealth Both Inside and Outside the Country – A Critical Analysis’ of the Standing Committee on Finance headed by M Veerappa Moily, 3 separate studies which were conducted by 3 premier institutes- The National Institute of Public Policy and Finance (NIPFP), National Council of Applied Economic Research (NCAER) and the National Institute of Financial Management (NIFM) showed that the unaccounted wealth held by Indians was estimated in the range of $216.48 billion to $490 billion over various periods between 1980 and 2010.
Key Points:
- Background: In March 2011, NIPFP, NCAER and NIFM were asked by the finance ministry to conduct studies to assess and survey unaccounted income and wealth both inside and outside the country. The committee had submitted its report to the 16th Lok Sabha Speaker Sumitra Mahajan on March 28, 2019.
- Outcome: The unaccounted income was highest in the sectors like real estate, mining, pharmaceuticals, pan masala, gutkha, tobacco, bullion, commodity, film, and education. But there was no reliable estimates of black money generation or accumulation. The estimates were based on the underlying assumptions and the sophistication of adjustments incorporated.
- NCAER study: It reported that unaccounted wealth accumulated outside India was estimated between $384 billion and $490 billion during the 1980-2010 period.
- NIFM study: It reported that total illicit outflow at the current value (including opportunity cost) from India in the reform period (1990-2008) was Rs 9,41,837 crore ($216.48 billion) and illicit outflows from the country was estimated on an average at 10% of the estimated unaccounted income.
- NIPFP study: It reported that during 1997-2009, illicit financial outflows were in the range of 0.2% to 7.4% of the Gross Domestic Product (GDP).
- Way ahead: The committee expects the Department of Revenue of the Ministry of Finance to continue their efforts to unearth and bring to book unaccounted income/wealth both within and outside the country including follow-up action on the seven reports of the Special Investigation Team (SIT) constituted on black money & 3 study reports on estimation of unaccounted money.
About Ministry of Finance:
♦ Founded: 29 October 1946
♦ Minister In-Charge: Nirmala Sitharaman
About NIPFP:
♦ Parent Organization: Ministry of Finance
♦ Headquarters: New Delhi
About NCAER:
♦ Headquarters: New Delhi
♦ President: Nandan Nilekani
About NIFM:
♦ Parent Organization: Ministry of Finance
♦ Established: 1993