After a long wait, the White Paper on Black Money is out in the public domain. However, if you are among the ones hoping it to cause a stir, you are up for disappointment. The paper neither makes big revelations nor is going to make difference to the way economy works. The paper in fact, at places, seems to be a tool to serve the Government. It portrays the latter as unfair victim by suggesting that the earlier estimates for capital flight from India are inflated and ignores the amounts transferred back. Interestingly, paper suggests that Indian accounts held in Swiss banks have come down by 60% between 2006 to 2010.
However, this data instead of a positive surprise, strikes us more with other possibilities. It could either be the case that the money has found its way back to the country without being taxed (round tripping). Or worse that Swiss accountholders have become cautious not to put all their eggs in one basket and diversified their exposure to other safe havens.The paper considers the reports of various international agencies . It however conveniently picks up the ones that cast it in favourable light while discarding the rest. It neither gives a firm idea of amount that could be stashed abroad nor exact ways to bring it back. It doesn't even reveal the names of tax offenders.
Nonetheless, its importance can't be undermined. For all its shortcomings, it does suggest the various possibilities or accounting policies using which the way money can be moved around. For example, it suggests that the huge investments in India from small economies like Mauritius and Singapore might actually be a roundabout way to bring the money back, escaping the taxes and to conceal identities.
To conclude, the white paper is not a sacrosanct document and fails to take the bull by the horns. Still, it's a first of its kind effort to at least recognize the problem. Hopefully, now that the issue has been made official, more actionable bills and regulations to tackle the menace of black money will follow.