By TIOL News Service

NEW DELHI, JUNE 24, 2019: AS per the Standing Committee Report on Unaccounted Money in the economy, there are certain sectors which generate more cash than other sectors. And they are real estate, mining, pharmaceuticals, pan masala, gutkka and tobacco industry, bullion and commodity markets, film industry, educational institutes and professionals. The other sectors namely securities market and manufacturing also showed high incidence of unaccounted income.

The Report states that various Studies conducted by different organisations have estimated Unaccounted Wealth outside the country as follows:

++ National Institute of Public Policy and Finance (NIPFP): During the period 1997-2009 illicit financial flows out of the country have been in the range of 0.2% to 7.4% of GDP.

++ National Council of Applied Economic Research (NCAER): Wealth accumulated outside India is estimated to exist between USD 384 billion and USD 490 billion

++ National Institute of Financial Management (NIFM): Results of estimation suggest that total illicit outflow at the present value (including opportunity cost) from India in the reform period (1990-2008) is Rs. 941837 crore (USD 216.48 billion).

Importantly, illicit outflows from the country are estimated on average to 10% of the estimated unaccounted income.

The Report highlights that the Revenue Secretary during the course of oral evidence deposed that:

“As regards the macro estimation of unaccounted income and wealth, the three studies have observed that the reliable estimation of unaccounted income and wealth is extremely difficult. These studies themselves have observed that it is extremely difficult. They have also reported a very huge variation in estimations of unaccounted income ranging from 7 per cent to 120 per cent of the reported GDP. There is a lack of consensus regarding the most suitable method in the Indian context.”