India is rather high in the black money hoarding list.
India is among the top 10 developing countries in the world with a black money outflow of $1.6 billion ( Rs.8,720 crore) in 2010, a report by Global Financial Integrity (GFI) said. The report, to be released on Tuesday, said the total outflow of black money from India since independence until 2010 was $232 billion, generally in the form of corruption, bribery and kickbacks. The cumulative value of illicit assets held by Indians during the same period is estimated to be $487 billion.
A whopping 75% of the black money is however held outside the country and doesn’t benefit the Indian economy in any way.
“Almost three-quarters of the illicit assets comprising India’s underground economy — which has been estimated to account for 50% of India’s GDP (around $640 billion in 2008) — ends up outside of the country,” the report’s author and former economist with IMF Dev Kar, said
That means Indian economy should legitimately be twice the size that it is today!
Interestingly, when we look at China, the situation is even worse there. India is nowhere near it. Not that we are competing or should compete. But it raises a useful question about the longevity of the growth economy that China is today. No economy can survive with almost $3 trillion in Black money, most of it outside the country!
Chart Courtesy – HT