Round The World
New Delhi, 2 December 2014
Black
Money Menace
TAP UK FOR NIZAM’S
WEALTH
By Ashok B
Sharma
There is a lot of talk of bringing
back black money of Indians stashed away in different tax havens abroad. The
ruling BJP had made this an issue in the election campaign before coming to
power. It had accused the then Congress-led UPA government of being unable to
bring back the black money, which according to its estimate ranges between $500
billion and $1,400 billion. A study by Global Financial Integrity put the
current value of illicit money outflow to be $462 billion.
The UPA Government in Parliament
stated that the CBI Director's statement on $500 billion of illegal money was
an estimate based on a statement made to the Supreme Court in July 2011. Some
reports claim a total of $1.4 trillion stashed away in Swiss bank, while the
Swiss Bankers’ Association and the Government have denied these reports as
“false and fabricated”.
Such are the wild guesses about the
quantum of black money stashed away in safe havens abroad. The BJP had earlier
accused the Congress-led UPA government about its incapability to bring back
the black money, while smaller countries like Vietnam
and South Korea
had taken firm steps and recovered their wealth.
The issue is what has the
governments, past and the present, done to bring back the known amount of money
stashed in the Royal Bank of Scotland
about 66 years ago? The amount is estimated to be 30 million pounds or over Rs
3 billion. The tale of this money dates back at the time of Independence and
partition of the country, when the seventh and the last Nizam of Hyderabad, Mir
Osman Ali Khan's finance minister Moin Nawaz Jung transferred 10,07,940 pound
sterling and nine shillings in the name of the then Pakistan High Commissioner
in London HI Rahimtoola in the National Westminster Bank, which is now called
Royal Bank of Scotland. Including the interest earned on the deposit, the
amount now is estimated to be over 30 million pounds or Rs 3 billion.
India had raised objection to
the transfer saying the Nizam was not an independent ruler and prevailed upon
the bank to freeze the account. Since then the matter is hanging fire.
The UK’s
House of Lords had later ruled that the account can only be unfrozen with the
agreement between three parties - India,
Pakistan
and the Nizam's heirs. However, the amount deposited in the Royal Bank of Scotland has no
will or trust deed.
The cultural advisor to the Nizam's
Trust, Muhammad Safiullah had estimated in 2008 that the Nizam's heirs may get
20 per cent of the money, while the Indian government will get a major share.
The last Nizam of Hyderabad had 18 daughters and 16 sons, out of which two sons
and three daughters are still alive. Besides, there are 104
grandchildren.
The Nizam had refused to accede to India after the country got Independence from British rule in August 15,
1947. He wanted Hyderabad to remain as an
independent princely State or join Pakistan. However, in September
1948, Hyderabad
had to join the Indian Union after an operation by Indian security forces. The
Nizam, who known as the richest man of his times, also financed Pakistan's
first national Budget.
In 2008 the UPA government, through
a Cabinet decision, decided to pursue for an out-of-court settlement after
Nizam's descendants met the then Prime Minister Manmohan Singh and then Finance
Minister Pranab Mukherjee. Mukherjee also went to Islamabad in 2008 and offered to settle the
issue. But India-Pakistan dialogue process got derailed after the 26/11 terror
attack in Mumbai. Again after revival, the dialogue process got derailed after
the Pakistani High Commissioner in India
met the Kashmiri Hurriyat leaders just before foreign secretary level talks
were slated to be resumed in Islamabad.
Thus, the matter still remains unresolved.
It is regrettable that while the BJP
and Prime Minister Narendra Modi raised such hue and cry over the failure of
the past government to bring back money, they have not yet made any singular
effort to bring back the wealth stashed away by Nizam in the Royal Bank of Scotland.
Of course, Prime Minister Modi made
some effort to set up a Special Investigation Team (SIT) to trace black money
at the instance of the Supreme Court. He raised the issue of black money at the
BRICS meeting at the margins of G20 in Brisbane
and as well as in G20 Summit. The G20 Leaders’ Communiqe noted some
transparency in tackling the menace of black money like dealing with base
erosion and profit shifting (BEPS) of multinational companies by deciding that
“profits should be taxed where economic activities deriving the profits are
performed and where value is created.” The leaders committed to finalising the
work in 2015, including transparency of taxpayer-specific rulings found to
constitute harmful tax practices. They welcomed the progress being made on
taxation of patent boxes.
The G20 leaders also decided to
begin a global common reporting standard for automatic exchange of tax
information (AEOI) on reciprocal basis by 2017 or end-2018, subject to
completing necessary legislative procedures.
The Government has received some
initial information of about 800 account holders with HSBC and is working on it
to come to some conclusions. With an eye on the future, the government is
planning to modify the Double Taxation Avoidance Agreements and other such
agreements inked with several countries so as to make disclosures would be
transparent. But all these are matters of future concern.
What is needed immediately is to
take up the issue of known quantum of wealth stashed away in the Royal Bank of Scotland by the
erstwhile Nizam’s finance minister. The amount is substantial at 30 million
pounds or Rs 3 billion. The Government’s coffer stands to gain substantially as
this is the wealth of erstwhile Hyderabad
State which rightly
belongs to the Indian Government after the merger. Like Nizam’s State immovable
property has become the property of the Government after merger so also the
erstwhile princely State’s coffer should be the wealth of the Government. India should take up this issue with the UK government
to unfreeze the account.--INFA
(Copyright,
India News and Feature Alliance)
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