Economic Offences: A Perspective

Economic Offences: A Perspective

Shakti Sinha Globalisation, economic development and the introduction of new technologies has posed considerable challenges to law enforcing authorities since the criminal has far more weapons in his armoury than before. What distinguishes economic offences from other, traditional criminal activities is the far greater potential to cause larger societal loss, far beyond the individual victims. In fact, many economic offenses have larger, national security implications and need far more attention from the Government and society than what we have seen till now. Till the opening up of the economy and the progressive reduction in tariffs and tax rates, smuggling and evasion of income tax were the key economic offences plaguing society. These have became minor or have got subsumed in other, more serious crimes like money laundering. Contrary to popular perception, holdings of Indian nationals in Swiss banks are not very large; this is not to discount its criminality but rather to draw attention to the far more pernicious effects of round tripping. Black money leaves India and is then sent back as FDI, routed through tax havens where  shell companies operate. Often a single room is shown as the address of hundreds of such shell companies. So while we are quick to celebrate FDI flows, we are not that quick to detect the unlikely origin of such moneys! Successive Governments have tried to renegotiate bilateral avoidance of double taxation treaties with certain key countries but have been unable to make much headway. Fortunately we have a Prevention of Money Laundering Act with very serious penalties including minimum imprisonment, separate prosecution for the original crime and for the assets generated from such crime, fines and forfeiture, in actual practise it is still early days. Fortunately, the Act has been amended recently to broaden its scope. The level of information collection and procession by the Financial Intelligence Unit of the Ministry of Finance has been stepped up, both across agencies and with similar agencies in other countries. These need greater support and focus. The other economic offense that we have great difficulty in controlling and which has destabilising effect on the economy and on national security is the circulation of counterfeit currency. Agencies of the...

Awakened from a deep slumber- is it enough to hold the ship up in bad weather? – Abhimanyu Naruka

Awakened from a deep slumber- is it enough to hold the ship up in bad weather? – Abhimanyu Naruka

At the dawn of the 20th century India moved briskly towards a free market economy and increased financial liberalisation. With these initiations things have improved in our country, especially sectors related to infrastructure, medical, education and services. Now the question here is, are these actions good enough to stand with world top economies, considering the fact that globalisation has increased the interdependence among all the major economies. The global economy is presently going through some rough phase post the American recession and the on going Euro zone crisis has had its effect on our economy, especially on our exports. This in turn is reducing the income of our nation and putting a counter effect on our Balance of trade. In simple words our nation’s income is reducing, but on the other hand side we just cant let the expenditure fall on important sectors in our country, thus presently our country is facing the problem of Fiscal deficit. Since august it seems the finance ministry team has woken up from deep sleep because we have seen a barrage of economic reforms in last three months, the most debated one FDI. Obviously these reforms seems to provide a fresh lease to our economy and as far as the FDI decision is concerned it is the responsibility of  the administration to look after the interests of the retailers specially in the rural and small town sections. But as the saying goes we need to work on these reforms and get the interest of the Investors going on our country otherwise we are going to leg behind China and Brazil. In past decade or so our country has seen massive urbanisation, though standard of living in urban areas has improved, on the same side there is little difference in the life of rural population. Rural issues are dying day by day, we still have infrastructure scarcity in these areas and a lot of agricultural issues are still unresolved. Government needs to take some dire actions with regard to this problem. One another trend which seem to have emerged in past decade or so is our rate of saving is going down, Urban India is playing a major role...

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