Black Money Current Affairs - 2020

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$770 billion Worth of Black Money entered into India during 2005-2014: GFI

US-based think tank Global Financial Integrity (GFI) in its report titled ‘Illicit Financial Flows to and from Developing Countries: 2005-2014’, has estimated that $770 billion worth of black money entered India during 2005-2014. During the same time period, the think tank estimates the exit of $165 billion in illicit money out of the country. It translates into 3% of India’s total trade of $5500.744 billion between the time period 2005-2014. This is the first global study that has placed equal emphasis on illicit outflows and inflows. As per the report, in 2014 alone, $101 billion black money entered India while USD 23 billion exited.

The report has suggested that the governments should set up public registries of verified beneficial ownership information on all legal entities to check the menace of black money. It has also asked all the banks to check for the true beneficial owner of any account.

Global Financial Integrity (GFI)

GFI is a non-profit, Washington, DC-based research and advisory organization founded by Raymond Baker in 2006 with an aim to quantify and study the flow of illegal money. In 2008, it published its first groundbreaking economic analysis of illicit financial flows flowing out of developing world. It has estimated that $1 trillion flows out of developing and emerging economies every year due to crime, corruption and tax evasion. Apart from producing an analysis of illicit financial flows, it also advises the developing countries on effective policy solutions and promotes pragmatic transparency in the international financial system.

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Government constitutes inter-departmental task force to crack down on benami firms

The Union Government has constituted inter-departmental task force comprising members of various regulatory Ministries and enforcement agencies to crack down on benami firms.

It is first major post-demonetisation move undertaken by Government for unearthing black money from shell companies used for large-scale money laundering and tax evasion.

Key Facts
  • The task force will be headed by Revenue Secretary and Corporate Affairs Secretary to monitor the actions taken by various agencies.
  • The involved agencies will invoke the stringent Benami Transactions (Prohibition) Amendment Act, 2016 against the shell companies and freeze their accounts and strike off the names of dormant companies.
  • It will also initiate disciplinary action against professionals abetting the companies and entry operators, who are used to launder unaccounted-for incomes into the banking system for projecting them as white money. 
Background

There are about 15 lakh registered companies in India, but only 6 lakh of them file their annual returns. It has raised suspicion that a large number of these companies are indulging in financial irregularities. During a small sample analysis of such companies conducted by Government has found that Rs.1,238 crore in cash was deposited in these entities during the November-December 2016 period, after demonetisation. It also has been found that 560 beneficiaries have laundered money to the extent of Rs. 3,900 crore with the help of 54 professionals, who have been identified by the Government.

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