New Delhi: A parliamentary panel of the previous Lok Sabha headed by Congress leader M. Veerappa Moily has said it is difficult to provide a credible estimate of the black money in India and of Indians held abroad.
The panel, whose preliminary report was tabled in the Lok Sabha on Monday, also called upon the Finance Ministry to make efforts with greater vigour to unearth black money in and outside the country.
“The unaccounted income and wealth inside and outside the country do not appear amenable to credible estimation in the context of India,” the Standing Committee on Finance (2018-19) said.
It said a study on black money was conducted by National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM) following recommendations made by the parliamentary panel in 2009 to conduct a thorough assessment of unaccounted wealth.
It said the three institutions found real estate, mining, pharmaceuticals, pan masala, gutka and tobacco industry, bullion and commodity markets, film industry, educational institutes and professionals as among sectors where the unaccounted income is found to be the highest.
Sectors such as securities market and manufacturing also showed a high incidence of unaccounted income, it said.
The three organisations made separate estimations of `unaccounted income and
wealth’ and `unaccounted wealth outside the country’.
“It appears that the reliable estimation of unaccounted income and wealth inside and outside the country is a difficult task, this inference is validated by the widely varying estimates of the unaccounted income arrived at by these three institutes. The Chief Economic Adviser has opined that there is no scope for arriving at a common estimate of unaccounted income by combining estimates from the three reports,” the panel said.
The committee said that Revenue Secretary had said in his oral evidence that the three studies have observed that the reliable estimation of unaccounted income and wealth is extremely difficult as regards the macro estimation of unaccounted income and wealth is extremely difficult.
He told the panel that the studies have also reported a very huge variation in estimations of unaccounted income ranging from 7 per cent to 120 per cent of the reported GDP and there is a lack of consensus regarding the most suitable method in the Indian context.
In its recommendations, the committee said it would expect the Ministry of Finance (Department of Revenue) to “continue efforts with greater vigour to unearth and bring to book unaccounted income/wealth both within and outside the country including follow-up action on reports of Special Investigation Team (SIT) constituted on Black Money as well as the three study reports”.
The committee said it would expect more fruitful outcomes both in terms of a much wider tax base as well as actual tax yield.
“In this context, the committee desires that the long-delayed Direct Taxes code should also be finalised at the earliest and reintroduced in Parliament with a view to simplifying and rationalising the direct tax laws in the country,” it said.