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India fourth-largest source of black money: Report

China, Russia and Mexico have maintained the top three spots

BS Reporter  |  New Delhi 

India fourth-largest source of black money: Report

India has been ranked the fourth-biggest source of black money by a US-based think tank, with $510 billion worth of illicit financial flows during 2004-2013, or $51 billion annually, on average.

The report, released on Wednesday by Global Financial Integrity (GFI), a research and advisory group based in Washington, says $1.1 trillion flowed out of developing and emerging economies illicitly in 2013 alone. It said the capital outflow stemmed from tax evasion, crime, corruption and other illegal activities.

The report says China tops the list for 2004-2013, with $139 billion average illicit financial flow per annum, followed by Russia ($104 billion per annum) and Mexico ($52.8 billion per annum).

GFI's report puts out data for 10-year periods. Its previous two editions had rankings for 2003-2012 and 2002-2011. India was at fourth and fifth spots in these periods, respectively. However, its average illicit financial flow per annum has steadily grown, being $34.4 billion for 2002-2011 and $44 billion for 2003-2012.

China, Russia and Mexico have maintained the top three spots for these periods.

The figure of India's average illicit financial flow per year for 2004-2013 is astounding considering the country's defence budget for 2015-16 was Rs 2.46 lakh crore, or $36.80 billion at an exchange rate of 66.88.

In all, during 2004-2013, GFI estimates that more than $510 billion went out of India. In the case of China the figure was $1.39 trillion and Russia $1 trillion.

Titled 'Illicit Financial Flows from Developing Countries: 2004-2013', the study shows that illicit financial flows first surpassed $1 trillion in 2011 and have grown to $1.1 trillion in 2013, marking a dramatic increase from 2004, when outflows totalled $465.3 billion.

China also had the largest illicit outflows of any country in 2013, amounting to $258.64 billion, the report said.

India fourth-largest source of black money: Report
"This study clearly demonstrates that illicit financial flows are the most damaging economic problem faced by the world's developing and emerging economies," said GFI President Raymond Baker in the report.

"This year at the UN the mantra of 'trillions not billions' was continuously used to indicate the amount of funds needed to reach sustainable development goals. Significantly curtailing illicit flows is central to that effort,"he said.

Noting that these UN goals called on countries to significantly reduce illicit financial flows by 2030, the report said the international community had not yet agreed on indicators, the technical measurements to provide baselines and track progress made on underlying targets.

In its report, GFI recommends that world leaders focus on curbing opacity in the global financial system, which facilitates these outflows.

The Narendra Modi government enacted a black money law on May 26 this year that put in place a compliance window under which officials were expecting as much as Rs 20,000 crore to be declared. But only Rs 4,000 crore was disclosed.


  • The black money law was passed by Parliament in the Budget session this year. It became a law on May 26
  • Offenders were given a window from July-September to declare. Tax and penalty of 30% on the assets was to be levied
  • Govt was expecting Rs 20,000 cr in declarations
  • Only Rs 4,160 cr worth of illegal wealth was declared, with Rs 17 cr in taxes & penalties till Nov 26
  • Anyone declaring assets after the window was to pay tax of 30% and penalty of 90% & face prosecution

First Published: Thu, December 10 2015. 00:27 IST
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