BY | December 18, 2012

By Arun Kumar

Washington, (IANS) The Indian economy suffered a staggering $1.6 billion in illicit financial outflows in 2010, capping-off a decade in which it experienced black money losses of $123 billion, said a report. An official said: “It has very real consequences for Indian citizens.”

India is ranked as the decade’s 8th largest victim of illicit capital flight behind China, Mexico, Malaysia, Saudi Arabia, Russia, the Philippines and Nigeria in the report by Global Financial Integrity, a Washington-based research and advocacy organization.

Titled “Illicit Financial Flows from Developing Countries: 2001-2010″, the report found that all developing and emerging economies suffered $858.8 billion in illicit outflows in 2010, just below the all-time high of $871.3 billion set in 2008 — the year preceding the global financial crisis.

“While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows,” said GFI Director Raymond Baker.

“Much focus has been paid in the media on recovering the Indian black money that has already been lost,” he said, suggesting policymakers should instead make curtailing the ongoing outflow of money priority number one.

“For the Indian economy, $123 billion is a massive amount of money to lose,” said Dev Kar, GFI lead economist and co-author of the report with GFI economist Sarah Freitas.

“It has very real consequences for Indian citizens. This is more than $100 billion dollars which could have been used to invest in education, healthcare, and upgrade the nation’s infrastructure,” he said.

A November 2010 GFI report, “The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008″, found that the Indian economy lost $462 billion to illicit financial outflows from 1948 through 2008.

Authored by Kar, the report measured India’s underground economy as 50 percent of GDP, with cumulative illicit outflows accounting for an increasing share of the total underground economy.

The new GFI study also estimates the developing world lost a total of $5.86 trillion to illicit outflows over the decade spanning 2001 through 2010.

The $858.8 billion of illicit outflows lost to all developing countries in 2010 is a significant uptick from 2009, which saw developing nations lose $776.0 billion.

GFI advocated that world leaders increase the transparency in the international financial system as a means to curtail the illicit flow of money highlighted by Kar and Freitas’ research.

RELATED

Target trying to regain merchandising authority, cuts forecast for Q2. The retailer seems to be affected by data breach of last year. Target has reportedly slashed full-year forecast as the loss it suffered from its data breach last year seems to be still affecting the...

Russian ban to cost Dutch economy 300 mln euro BRUSSELS: Russia's ban on import of agricultural goods from the EU will have an impact on 5,000 jobs in the Netherlands and will cost the country's economy 300 millions euros, the Dutch national statistics office CBS reported...

Japan-Oman tax treaty to be in force next month TOKYO: A double-taxation avoidance agreement between Japan and Oman is expected to enter into force next month, the Japanese Foreign Ministry announced Monday. Japan notified Oman on Sunday of the completion of its internal...

Quantum computing methodology is certainly going to be a gigantic leap for next gen development Quantum computing methodology seems to be the most talked about thing across the tech world at the moment. This is because of the fact that if the latest development is actually...

Microsoft Nokia Lumia 530 with 512 MB RAm @Rs7349 is expensive. Nokia should have priced it at Rs 6500 at the most. If you are among the people who love Windows Phone handsets and wanted it cheap, this is the right time to go for it. Microsoft, the new Nokia masters have...