Rich Indians hide billions in overseas accounts

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The Independent Online

India has lost hundreds of billions of dollars over the past 60 years as companies and the rich stashed cash overseas to avoid taxes and hide ill-gotten gains, widening inequality and depriving the poor of crucial resources, a new report says.

The flood of illegal cash has swelled to ever greater heights since the early 1990s, and averaged $16bn a year from 2002 to 2006, as the opening of India's economy created more wealth and opportunities to move it across borders, according to the study by Dev Kar, a former International Monetary Fund economist.

Mr Kar, now senior economist at Global Financial Integrity, a group in Washington which researches the flow of illicit money, said India's black money – at least $462bn since the late 1940s – could have paid for its entire infrastructure needs and much else.

He said: "We could have had better schools, better health programmes, better nutrition programmes for the poor. Children could have been vaccinated and given access to fresh drinking water. Many areas don't have electricity."

The gap between India's rich elite and the poor, who number in the hundreds of millions, has widened amid rapid economic growth over the past two decades, adding to social tensions. The report says the funnelling of wealth overseas has contributed to that inequality. Mr Kar said: "The high net worth individuals are the ones driving illicit flows."

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