Swiss bank balance

THE news that money parked by Indians in Swiss banks grew 50 per cent created such a flutter that the government had to field Union Ministers Piyush Goyal and Arun Jaitley to clear the air. At first sight, the surge does come across as unusual, especially after a downturn in the previous three years following strong government rhetoric on bringing back black money. In fact, the narrative that created the perception about the government’s fixity of purpose on cracking down on black money was set during the famous observation by Narendra Modi when he was on the stump: that the NDA, if voted to power, would “bring back” every paisa that was stashed abroad.  

The BJP government’s positioning on black money was reinforced by demonetisation that initially wowed not just ordinary citizens but even Nobel laureate Richard Thaler. But as Piyush Goyal asked, how could all the money be assumed to be illegal? “To assume all deposits are per se tax evaded money in Switzerland is to start on a shaky presumption”, weighed in Jaitley. In absolute terms, an increase of about Rs 4,000 crore, or $500 million, is chicken feed when compared to the massive sums moved around in the international financial system. Total Indian deposits of Rs 7,000 crore are also negligible when compared to Rs 100 lakh crore of all foreign clients held in Swiss banks.  

The news about the rise in Swiss deposits in the end may amount to nothing. But the excitement it created shows that the government needs to re-establish a sense of sincerity about its commitment to smoke-out illegitimate money, whether here or abroad. It is incumbent on the government to accelerate the pace of investigations in all similar cases while Piyush Goyal must observe his promise of sifting through the data once it is available from the Swiss authorities and prosecuting all those who have stepped out of line. In terms of perception management, the government needs to undertake these steps to offset its lukewarm performance in this aspect so far.