People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 21

May 27, 2012

Whitewashing Black Money


The Polit Bureau of the Communist Party of India (Marxist) issued the following statement on May 22, 2012.


THE finance ministry’s white paper on black money, presented in parliament, reflects a trite exercise devoid of any political will. Neither has any credible estimate of black money stashed abroad been provided by the white paper nor any concrete measures suggested to retrieve the illicit funds.


The paper states that the total amount held in the Indian deposits of Swiss banks fell from Rs 23,373 crore in 2006 to Rs 9,295 in 2010. The government seems to have no clue as to where this amount has gone. There is no assessment of Indian deposits in other offshore financial centres. The paper suggests that much of illicit financial outflows are round-tripped into India through FDI via the Mauritius route or via FII investments through participatory notes. Yet there is no specific recommendation to ban participatory notes or to scrap the DTAA with Mauritius


The paper cites the Global Financial Integrity study which estimated the current value of illicit financial flows from India between 1948 and 2008 to be around 462 billion dollars (Rs 25 lakh crore approximately). The fact that these are not gross overestimates can be seen from the information provided by the white paper: over the last two financial years (2010-2012) alone the Directorate of Transfer Pricing has detected mispricing (such as over-invoicing and under-invoicing of imports and exports) to the tune of a whopping Rs 67,768 crore in 1,343 cases. Rs 48,951 crore have also been collected by the Directorate of International Taxation in just two years, between 2010 and 2012. It is clear that these amounts detected or collected over the past two years still comprise the tip of the iceberg. 


The white paper reveals that the amounts of undisclosed income of Indians, who figure in the lists of secret bank account holders received from the German and French governments respectively, are Rs 40 crore and Rs 565 crore only. These are minor parties. The Indian individuals and entities who are holding bulk of the illicit wealth in offshore accounts, are yet to be identified. The white paper disappointingly reiterates the myriad technical difficulties involved in retrieving these huge amounts stashed abroad.


The lack of progress in this direction raises doubts over the sincerity of the UPA government on this crucial issue. The Polit Bureau of the CPI(M) demands that a serious effort be made to quantify illicit funds stashed abroad by Indians and identify the culprits. Undisclosed assets of Indians located abroad should be confiscated by the government as per the provisions of the Income Tax Act.


Against Increase in Petroleum Prices


Having met at New Delhi on May 23, 2012, the Left parties --- CPI(M), CPI, RSP and Forward Bloc --- issued the following statement.


THE Left parties strongly oppose the proposed increase in the prices of petrol, diesel and other petroleum products being contemplated. 


Such an increase will be a cruel blow to the people who are already suffering from severe price rise.

The Left parties called upon all their party units to immediately organise protest actions when such price hikes are announced.


Campaign on

Food Security

The Left parties discussed and finalised the campaign to be organised on the food security bill and the movements to be launched for ensuring a universal public distribution system. The proposed food security bill does not serve the purpose of ensuring food security for all citizens. The Left parties will conduct a month long campaign from the grassroots level in all the states in July.  This will be followed by a continuous dharna during the monsoon session of parliament from July 30 to August 3, 2012 in New Delhi, in which thousands of people will participate. This dharna will see the participation of the national leaders of the Left parties.




The Left parties reiterated their stand that there should be a candidate for the presidential election based on the widest possible acceptance.


Those who attended the meeting were the general secretaries of the four Left parties, viz Prakash Karat, Sudhakar Reddy, T J Chandrachoodan and Debabrata Biswas respectively, along with A B Bardhan, Sitaram Yechury, S Ramachandran Pillai, D Raja, Abani Roy and G Devarajan.