DRI discounts estimate of $505bn outflow of black money from India in 2004-13

The estimate of $505 billion (around Rs33,91,000 crore) black money outflow from India between 2004 and 2013 by a US-based think tank is "heavily exaggerated", the Directorate of Revenue Intelligence (DRI) has informed the Supreme Court-appointed SIT, which is looking into illegal cash flows and bank accounts.

The Washington-based non-profit research and advisory organisation Global Financial Integrity, had, in its report,`Illicit Financial Flows from Developing Countries 2004-2013', estimated illegal trade flows through trade misinvoicing in India for the period at $505 billion.

The SIT, headed by former Supreme Court judge Justice M B Shah, had in February this year asked the DRI to ascertain the veracity of the report.

The DRI then sought relevant details from GFI and, according to the DRI's findings, underinvoicing or overinvoicing of trade to the tune of $505,555 million ($505 billion) during 2004-2013  could only be an exaggeration.

They said the DRI report has been shared with the SIT, which is considering sending the agency's officials to select countries abroad, including the US and Switzerland, to assess the actual amount of illicit money.

The sources said the actual amount of black money outflow - through trade-based money laundering - could be far less than mentioned in the report. It did not confirm, nor did it elaborate the basis of its assessment.

"The exact assessment would be possible only when a team of officers go out and analyse all details. But it will be far less than $505 billion," reports quoted sources as saying.

The GFI, however, is convinced that the figures are consistent with the data provided by the governments of India and Switzerland to the International Monetary Fund, says a PTI report.

The SIT, in its second report, has observed that since reports like those of Global Financial Integrity, which calculate illicit financial flows from various countries, are widely used in academic circles and it is very crucial to ascertain the veracity of such reports and that the DRI has been asked to look into the matter as per a finance ministry release issued in February.