NEW DELHI, India, May 2, (Reuter): A Parliamentary Committee has accused the Indian government of “laxity or complacency” in failing to unearth billions of dollars of untaxed “black” money circulating in the economy. The estimates committee said in a report released yesterday the black money had reached “an alarming magnitude” it quoted (31 billion dollars) escaped taxes in an unspecified period up to 1984.
The amount is almost a fifth of India’s gross domestic product for that year.
The Committee said there was considerable scope to recover undeclared income from the self-employed, such as lawyers, doctors, chartered accountants, tailors, and architects.
It said the Finance Ministry’s revenue collection agencies had “done precious little”. It suggested the ministry set up. A special group working exclusively on ways to recover undeclared wealth.
The report is likely to embarrass further Prime Minister Rajiv Gandhi, also Finance Minister, whose government has been accused of a series of financial scandals, Parliamentary sources said.
The charges have not been substantiated and some are under investigation.
Gandhi has been accused of protecting friends from investigation by a US. Detective agency hired by the government to investigate money held abroad by Indians.
A sizeable portion of the black money is kept abroad to avoid Indian taxes, business analysts say.
Gandhi told Parliament this week that he had asked the Swedish government to enquire whether the Bofors arms company secured a 1.3 billion dollar artillery contract after making payoffs to Indian politicians and officials, as alleged by Swedish radio. Bofors has denied the charge.
Article extracted from this publication >> May 8, 1987