Presenting the general budget for 2011-12 in the Lok Sabha today, finance minister Pranab Mukherjee said that to deal with the problem of generation and circulation of black money, the government has put into operation a five-fold strategy which consists of joining the global crusade against black money; creating an appropriate legislative framework; setting up institutions for dealing with illicit funds; developing systems for implementation; and imparting skills to the manpower concerned for effective action.
Mukherjee further said that while the membership of the financial action task force was secured in June last year, the government has also joined the task force on financial integrity and economic development, the Eurasian group (EAG) and the global forum on transparency and exchange of information for tax purposes.
Discussions have also been concluded for 11 tax information exchange agreements (TIEAs) and 13 new double taxation avoidance agreements (DTAAs) along with revision of provisions of 10 existing DTAAs.
Mukherjee said that the amendment in the money laundering legislation in 2009 has significantly increased its scope and application. The number of cases registered under this law has increased to over 1200 by January this year. The strength of the enforcement directorate has been increased three-fold to deal effectively with the increased workload.
He informed that the ministry of finance has also commissioned a study on unaccounted income and wealth held within and outside the country. It would suggest methods to tax and repatriate this illicit money.
To strengthen controls over prevention of trafficking and improve the management of narcotic drugs and psychotropic substances, it has been proposed to announce a comprehensive national policy in the near future, the finance minister said.