Show Me the (Black) Money

The more things change, the more they remain the same. A cliché, no doubt, but that is what came to my mind when the NDA government informed the Supreme Court that “…it cannot disclose such details [about tax evaders] given by countries with which India has double taxation avoidance agreement (DTAA)” (see here). To remind those who might have forgotten, this is what the UPA Finance Minister, Pranab Mukherjee had said some time back “The government has names of Indian account holders in Liechtenstein's LGT Bank and information given by German banks, but the government cannot reveal the names right now because of the secrecy clause” (see here).

One still remembers the tirade launched against the UPA government by the BJP in the years leading up to the elections of 2014:

• L.K. Advani in 2011: “The Congress-led UPA government is functioning in a dishonest manner by not making public the names of those who have stashed black money abroad...Congress fears it will be exposed as most of the illegal money belongs to the party leaders” (Economic Times).
•  After this, Modi picked up the same issue and, being a master of demagoguery, went even further: “Advani Ji is only seeking repatriation of black money, but only the Congress is getting the current. Why does the Congress not want to bring back black money? Is it because it belongs to them?” (DNA India).
• Yashwant Sinha promised that the BJP would reveal names of all tax evaders who have stashed money abroad if it came to power. Referring to double taxation treaty he stated: “…these names have been with the Government of India for the last two years. They say that the double taxation avoidance agreement prevents them from disclosing”; and further “The question is why you haven't been able to prosecute them in two years. Disclose 10 names, 20 names, but how does [sic] all these 800 names remain a secret for two years. That is where there is some mystery…” (Hindustan Times).

The storm-troopers of the BJP in the social media went after the UPA with all their might. Using the most vituperative language, all UPA leaders, including the Prime Minister Manmohan Singh, were reviled and torn to pieces. Alas, the chickens have now come home to roost. The NDA is using the same reason as the UPA for not revealing names.

Of course, in this embarrassing imbroglio, the Congress still has to be blamed for this so as to keep pure the well-cultivated image of the NDA. Finance Minister Jaitley has already set the ball rolling by stating: “Tax pact signed by Congress government in 1995 with Germany is constraining Centre from declaring names of persons having black money account” (Times of India). 

Article 26 of this agreement with Germany reads as follows: 

ARTICLE 26 - Exchange of information - 1. The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Agreement. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by this Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions (emphasis added).

The segment in bold above is the offending item which has prevented the government from disclosing the names of tax evaders.

Are we to understand that a Cabinet Minister in Modi’s government did not know provisions of this agreement? If he did, all the earlier rants against the UPA, before and during the elections, were just show-biz designed to hoodwink the electorate into thinking that the UPA had something to hide. Of course, if Jaitley – a high profile lawyer – did not know the provisions of the law, then surely the competence of the minister should be questioned. The agreement with Germany from which I have quoted above has been in the public domain for a long time. I found the location of this information and the relevant article in about 15 minutes of search on the internet. Who, in his or her right mind, can possibly believe that the NDA did not have access to this information?  This, of course, means that all the BJP leaders quoted above (Advani, Modi and Sinha) were being dishonest in their criticism of the UPA government. My own belief is that the BJP all along knew perfectly well that the double taxation avoidance agreement prevented the government from disclosing details of tax evaders; at the very least it must have known all this from the time it assumed power. But it chose to keep quiet about this lest it dilute its propaganda against the UPA. After all, the UPA had to be vanquished not only at the Centre but also in Assembly elections, especially in Maharashtra. Is it just a coincidence that the government gave this information about the non-disclosure clause to the Supreme Court after the elections had concluded in Maharashtra?

Now, as this tragi-comedy unfolds, I wait for some sign of contrition from the NDA government: contrition for having unfairly targeted the UPA; contrition for having misled the electorate on a matter of grave importance for the Indian economy; contrition for the smoke and mirrors of instituting an SIT at the behest of the Supreme Court when it knew all along that genuine progress would hit the wall of double taxation treaty.

Will the storm-troopers of the BJP pause to think of what has happened and how they have been misled? Well, storm-troopers are useless if they begin to think on their own, so I doubt that will happen.

Should I hold my breath, waiting for this sign of contrition from the NDA government? I think I will choke long before that happens, if at all.