Crime, corruption drained Rs21,00,000 cr of India's wealth in 10 years: study news
12 December 2013

Total black money outflows from India stood at nearly $343 billion (about Rs21,00,000 crore at Rs62 to a dollar) during the 10-year period between 2002 and 2011, says a report.

This puts India as the fifth-largest "exporter" of black money, the report says, adding that in 2011 India ranked third when residents stashed away as much as $84.93 billion in safe havens abroad.

Financial drain on the developing world due to crime, corruption, and tax evasion totalled $946.7 billion in 2011, up over 13.7 per cent from $832.4 billion in 2010, according to a new study published by Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organisation.

At $947 billion, net outflows of illegal wealth  were approximately 10 times the $93.8 billion of net official development assistance (ODA) to 150 developing countries that year.

This means that for every $1 in economic development assistance going into a developing country, roughly $10 of capital are lost via illicit outflows.

Such illicit outflows stood at $270.3 billion in 2002.

The findings peg cumulative illicit financial outflows from developing countries between 2002 and 2011 at $5.9 trillion.

''As the world economy sputters along in the wake of the global financial crisis, the illicit underworld is thriving-siphoning more and more money from developing countries each year,'' said GFI president Raymond Baker.

''Anonymous shell companies, tax haven secrecy, and trade-based money laundering techniques drained nearly a trillion dollars from the world's poorest in 2011, at a time when rich and poor nations alike are struggling to spur economic growth.  While global momentum has been building over the past year to curtail this problem, more must be done. This study should serve as a wake-up call to world leaders: the time to act is now.''

Over the past decade, the report said, illicit outflows from developing countries increased by an annual rate of 10.2 per cent in real terms, outpacing GDP growth by a significant margin. 

''This underscores the urgency with which policymakers should address illicit financial flows.''

''Illicit financial flows have major consequences for developing economies, 'explained LeBlanc, the co-author of the report.

''Poor countries haemorrhaged nearly a trillion dollars from their economies in 2011 that could have been invested in local businesses, healthcare, education, or infrastructure.  This is nearly a trillion dollars that could have been used to help pull people out of poverty and save lives.  Without concrete action, the drain on the developing world is only going to grow larger,'' he added.

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Crime, corruption drained Rs21,00,000 cr of India's wealth in 10 years: study