India enters ‘black money’ agreement

India has put into force tax information exchange agreements with three Caribbean international business centres and completed negotiations with two more.



India is hoping to use these agreements to pull back into its tax net nationals who operate within the Indian shadow economy and funnel so-called “black money” into investments overseas.



According to Arun Kumar, the author of the book ‘Black Money in India’, at least US$70 to 80 billion flow out of India every year into overseas investment hedges like gold or real estate.



Kumar estimates that the cost to India of its “black economy” was 5 per cent of GDP growth every year since the mid-70s.



He said India’s economy would have been the second largest economy in the world, if not for this practice.