$21 billion of black money taken out from India in 2014, says report by Global Financial Integrity

Black money amounting more than $21 billion was illegally shipped out of India in 2014, says a latest report by Global Financial Integrity (GFI), the international watchdog, a jump of 19% from the previous year.

GFI in its report also shared, for the first time, information on the inflow of black money, which is equally damaging to the economy. The report stated that India became the destination of a staggering $101 billion of illegal money in 2014, marking a rise of nearly 11% over the previous year.

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Across the globe, between $620 and $970 billion funds were estimated to be drained out of the developing world, a major way of which was through trade fraud. On the other hand, inflows of illegal money were estimated to stand at $1.4-2.5 trillion.

Put together, the illegal inflow and outflow accounted for 14-24% of the total trade of developing countries over 2005-2014.

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For the report this year, GFI adopted a much more rigorous method of collecting and analysing data about international trade and balance of payments. While it used IMF global data on direction of trade, it also included information from other sources so that gaps in data could be plugged.

Since it included Swiss data on gold exports, which it had earlier omitted, India's outflow and inflow figures took a drastic turn.

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"Due to India's large imports of gold from Switzerland, rectifying this data issue significantly closed observed bilateral trade gaps between the two countries," economist Joseph Spanjers, who co-wrote the report, told TOI.

For their cooperation, Spanjers thanked India's Directorate of Revenue Intelligence and the Swiss Directorate General of Customs.

Also read: Gold smuggling in India breaks all records, crosses Rs 1000 crore