Modi government forms SIT to probe black money

In its first decision after taking charge, Prime Minister Narendra Modi's government Tuesday announced the formation of a Special Investigation Team (SIT) to probe black money, mostly stashed abroad.

The decision was taken in the first meeting of the union cabinet chaired by Prime Minister Modi.

Addressing a media conference after the cabinet meeting Law and Telecom Minister Ravi Shankar Prasad said the SIT will have retired Supreme Court justice M.B. Shah as its head.

"It is a matter of great satisfaction that we have constituted a SIT to bring back black money as per Supreme Court orders," Prasad said.

Secretary revenue, deputy governor of the Reserve Bank of India, director of the Intelligence Bureau, director of the Enforcement Directorate, director of the Central Bureau of Investigation (CBI), chairman of the Central Board of Direct Taxes and director of the Research and Analysis Wing (RAW) will be among the members.

"The highest level of financial, revenue and economic management of the country are members of the SIT. This indicates the commitment of the new government of India," said the minister.

"We are committed to fighting black money," he added.

Although there is no official figure, various estimates put the quantum of black money upto $1.4 trillion.

The ruling Bharatiya Janata Party (BJP) in a report in 2011, had estimated India's black economy to be between $500 billion to $1.4 trillion. BJP was the main opposition party at that time.

The US-based think tank Global Financial Integrity has pegged the illicit money outflow from India to the tune of $462 billion.

The black money refers to the money that is earned and transferred illegally abroad in tax havens like Cayman Islands and Mauritius, generally to avoid tax. Nearly a third of black money transactions are believed to be in real estate. Manufacturing and gold and consumer goods purchases are the other major areas of black money transactions.