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'India lost USD 123 billion in black money in a decade'

Published: 18th December 2012 02:25 PM  |   Last Updated: 18th December 2012 02:32 PM   |  A+A-

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India lost a whopping USD 123 billion in black money in 2001-2010, making it the eighth largest victim of illicit financial outflow, a US-based research and advocacy organisation said in a report.

However, India's black money loss of USD 123 in 10 years is far less that China, which according to the report suffered a loss of USD 2.74 trillion during the same period (2001 to 2010), followed by Mexico (USD 476 billion), Malaysia (USD 285 billion), Saudi Arabia (USD 201 billion), Russia (USD 152 billion), the Philippines (USD 138 billion) and Nigeria (USD 129 billion).

India is the eight largest victim of black money loses, said the report 'Illicit Financial Flows from Developing Countries: 2001-2010,' released by Global Financial Integrity (GFI). India is the only South Asian country to figure in the top 20 list of such nations.

In 2010 alone, the Indian economy suffered USD 1.6 billion in illicit financial outflows.

"USD 123 billion is a massive amount of money for the Indian economy to lose," said Dev Kar, GFI lead economist and co-author of the report.

"It has very real consequences for Indian citizens. This is more than USD 100 billion which could have been used to invest in education, healthcare, and upgrade the nations infrastructure. Perhaps last summers electrical blackout would have been avoided if some of this money had remained in India and been used to invest in the nation's power grid," he said.

While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows, said GFI director Raymond Baker.

"Much focus has been paid in the media on recovering the Indian black money that has already been lost. This focus is for naught as long as the Indian economy continues to hemorrhage illicit money. Policymakers and commentators should make curtailing the ongoing outflow of money priority number one," he said.

The reportthe first by GFI to incorporate a new, more conservative, estimate of illicit financial flowsfound that all developing and emerging economies suffered USD 858.8 billion in illicit outflows in 2010, just below the all-time high of USD 871.3 billion set in 2008the year preceding the global financial crisis.

"Astronomical sums of dirty money continue to flow out of the developing world and into offshore tax havens and developed country banks," Baker said.

"Regardless of the methodology, it's clear: developing economies are hemorrhaging more and more money at a time when rich and poor nations alike are struggling to spur economic growth. This report should be a wake-up call to world leaders that more must be done to address these harmful outflows," he said.

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