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(Source: PTI / The Financial Express)

Modi’s 2019 campaign gets a big boost! Swiss banks show India winning Black money battle

Lok Sabha elections 2019!

Prime Minister Narendra Modi’s opponents today virtually lost one of the biggest poll planks they could have deployed at ease against the ruling BJP in the 2019 Lok Sabha elections campaign – Black Money.

A recent report claiming 50% rise in money parked by Indians in Swiss banks had given the opposition the right ammunition at the right time to take on Modi. Perhaps, not anymore.

Remember, black money was one of the most prominent poll issues during the 2014 Lok Sabha elections campaign.

Modi had then reaped a fortune by convincing people he would put a curb on the flow of black money from India to the Swiss banks.

The prime minister’s promise took a big beating last month when news agency PTI reported that money parked by Indians in Swiss banks rose over 50% to Swiss Francs (CHF) 1.01 billion (Rs 7,000 crore) in 2017. Coming in the year after demonetisation, which Modi projected as a move to curb domestic black money among many other things, the report suggested a surprise reverse of three-year downward trend amid Modi government’s clampdown on suspected black money stashed there.

However, it now turns out that the PTI report was wrong, according Union finance minister Piyush Goyal. The minister informed the Parliament today that Indian deposits in Swiss banks fell by 34.5 per cent in 2017 and by 80 per cent since the Modi government came to power in 2014. The minister cited data from the global body of central banks, the Bank for International Settlements (BIS).

Goyal rebutted last month’s report that had quoted Swiss National Bank, Switzerland’s central bank, as saying in its annual report that Indian deposits had risen by 50 per cent in 2017. Goyal told the Rajya Sabha that Swiss authorities told him in a written reply that that media reports didn’t take into account the “way the (SNB) figures have to be interpreted.”

PTI today quoted Goyal saying: “The Swiss Authorities say that the figures published by the Swiss National Bank are regularly mentioned by the Indian media as a reliable indicator of the amount of assets held with Swiss financial institutions in respect of Indian citizens. They clarify how this is wrong. They say more often than not, the media reports have not taken into account the way the figures have to be interpreted which has resulted in misleading headlines and analysis. This is (the Swiss) government response…Moreover, it is frequently assumed that any assets held by Indian residents in Switzerland are undeclared (so-called ‘Black Money’).”

According to Swiss authorities, Goyal said, the more reliable data source for deposits held in Switzerland is the Locational Banking Statistics (LBS) of Bank of International Settlements.

In a written reply to the Parliament, the finance ministry said, “The Data Collected by Swiss National Bank in collaboration with Bank for International Settlements (BIS) shows that the loans and deposits of Indians, other than Banks, in the Swiss banks decreased by 34.5% in the year 2017 as compared to 2016. Further, there has been significant reduction in Swiss non-bank loans and deposits of Indians by 80.2% between 2013 and 2017.”

The government of India has undertaken a number of initiatives since 2014 to curb the black money stashed abroad. According to the finance ministry, some of them are:

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