Over $21 billion illicit financial outflows from India in 2014
Data from international watchdog Global Financial Integrity has revealed that in 2014, over $21 billion in illegal money found its way out of India. At the same time, India accounted for a staggering $101 billion in illicit financial inflows, up 11% from that in 2013. The report compiled data on illegal financial flows across the world, mainly between developed and developing economies.
What does global data reveal?
Data from around the world revealed that $620-970 billion was drained out of developed economies through fraudulent means. Illicit financial inflows accounted for $1.4-2.5 trillion. The combined illicit flows account for almost 14-24% of the total trade among developing nations. The report compiled data from the IMF, World Bank and various governments.
What about India?
The report said that between 2005-2014, $770 billion in black money entered India while $165 billion was illegally moved out of the country. The $770 billion accounted for 14% of India's total trade of $ 5.5 trillion in that time period. The report suggested that the illicit flows were mainly between developed and developing countries and India was among the top recipients.
India's affinity for gold played a role?
The report said adding imports of gold, which was not included in previous reports drastically affected India's figures. The gold data helped close gaps in bilateral trade figures between India and other developing countries, reducing the overall sum of inflows and outflows.
87% illicit trade through misinvoicing
The report said 87% of the illicit financial flows were because of misinvoicing. Companies and individuals provide inflated bills to colluding foreign companies, and the difference in amount is stashed away under their name illegally abroad. In the same way, understated bills are used to allow illicit inflows into a country. The report said robust financial monitoring is the only possible solution.
