Black Money
Money.Reuters File

With the issue of India's black money once again on the front-burner, here is a quick fact sheet comprising all that you need to know about India's parallel economy. 

What is Black Money?

'Black Money' is the term used to refer to funds that are obtained illegally, which are not declared to authorities to evade taxes. It is usually stashed in foreign countries known to be tax havens.

The term is interchangeable with 'illicit capital', 'parallel economy', 'black wealth', and 'dirty money' among other terms. 

According to a globally-cited report, 'Illicit Financial Flows from Developing Countries: 2002-2011' by Global Financial Integrity (GFI), a Washington-based watchdog, released in December 2013, developing countries lost a total amount of $6 trillion due to black money, between 2002 and 2011.

The main reasons cited were poor governance, tax regulation, corruption and crime.

How Big is India's Black Economy?

India has lost hundreds and millions of dollars to black money over the last few decades, and as of 2011, it was the fifth largest exporter of black money in the world.

According to the Global Financial Integrity, India lost as much as $343,932 million to foreign accounts between 2002 and 2011.

Only China, Russia, Malaysia and Mexico had larger black economies than India.

Most Indian black money holders prefer to stash their cash in Swiss banks, and in 2013, Indians held as much as ₹14,000 crore in the banks there, seeing a 40% jump from the previous year.

Estimates of India's black economy range anywhere between $100 billion to $500 billion. 

When was the Black Money Issue Raised in India?

The lid was blown off the black money stashed by Indians in foreign banks, especially in Switzerland, in 2008, when a whistleblower leaked details of about 25,000 accounts at HSBC in Geneva, which he shared with the French government.

France, in 2011, shared the names of account holders with the respective countries, including India. There were said to be about 800 names of Indians on the list.

In 2009, Germany had also handed over a list of Indian names who held accounts in the LGT Bank in Liechtenstein.

In 2011, senior lawyer Ram Jethmalani filed a PIL in the Supreme Court asking it to direct the government to take action in bringing back black money stashed in foreign banks.

The Supreme Court set up a Special Investigation Teamto look into the black money probe in 2011, which is currently headed by two retired SC judges - Justices M. B. Shah as the chairman and Arijit Pasayat as the vice-chairman.

What Steps is India Taking to Bring Back Black Money?

The NDA government on Thursday submitted an entire list of 627 names from Geneva's HSBC Bank to the Supreme Court.

The Court has now directed the SIT to submit a status report on the accounts by 30 November. It has also asked the government to bring all issues related to confidentiality clauses and international agreements before the SIT.

The government had so far cited reasons of breach of confidentiality clauses in existing bilateral double taxation avoidance agreements signed with other countries for not disclosing names before the full investigation is complete.

The SIT has been directed to complete investigations by March 2015.

The government is also said to have a separate list of 612 Indians with foreign accounts from the International Consortium of Investigative Journalists.