The Narendra Modi government has been under flak for not keeping up with its electoral promise of bringing back black money from overseas tax havens. A recent investigation has revealed that HSBC's Swiss private banking arm has 1,195 Indian clients holding undisclosed accounts/assets abroad (Source: Indian Express). This is nearly double the number given by the French government in 2011. However in the absence of crucial details, the wait for some concrete action by the government has been pushed ahead.
As per a report by the Swiss government, bank account details of Indians under the 'automatic information exchange' framework would be provided by only 2018 (Source: Firstpost). The 'automatic information exchange' mechanism was developed by The Organization for Economic Co-operation and Development (OECD) to enable countries to share information in the fight against tax evasion and frauds. Under the framework, countries would collect data from 2016 and exchange information from September 2017 onwards. While 58 countries in the first group have agreed to exchange information in 2017, Switzerland being part of the second group will share information in 2018.
The biggest challenge with regard to unaccounted money in overseas countries is in getting necessary information to build a strong case of tax evasion. In this case the provisions of the specific information exchange agreement with a country will play a vital role. India has increased efforts to bring black money back. In addition to automatic exchange of information, the country is also re-negotiating tax treaties with various countries. It remains to be seen whether the menace of black money is finally tackled or remains a mere ploy by politicians to attract vote bank.