The biggest black money case that has come up so far is that of the Adani group, promoted by Gautam Adani, one of Modi’s closest associates, writes Josy Joseph in his book A Feast of Vultures: The Hidden Business of Democracy in India. Here’s an excerpt.

A protester in Pune. Credit: Wikimedia Commons.

A protester in Pune. Credit: Wikimedia Commons.

The practice of siphoning off ‘black money’ – the illegal earnings of India’s rich and powerful – has many dire implications, including a crippling effect on the country’s efforts at fighting poverty, illiteracy and other socio-economic challenges, scuttling national security priorities, fleecing the public exchequer and stymieing competition.

The BJP, which was the main opposition party in 2011, constituted a task force to study the phenomenon of black money and released a report later. The following year, the UPA government presented a white paper on black money in parliament. The presentation of this ninety-seven-page report was among the many actions that the government promised. Finance minister Pranab Mukherjee, who became the thirteenth president of India a year later, admitted in the report: ‘There is no doubt that manifestation of black money in social, economic and political space of our lives has a debilitating effect on the institutions of governance and conduct of public policy in the country. Governance failure and corruption in the system affect the poor disproportionately. The success of an inclusive development strategy critically depends on the capacity of our society to root out the evil of corruption and black money from its very foundations. Our endeavour in this regard requires a speedy transition towards more transparent and result-oriented economic management systems in India.’

The white paper quoted a report by the World Bank in July 2010 that estimated ‘shadow economies’ of 162 countries from 1999 to 2007. It said that the weighted average size of the shadow economy (as a percentage of official GDP) of these countries in 2007 was 31% compared to 34% in 1999. For India, these figures were 20.7% and 23.2 % respectively. The government admitted that its own Department of Industrial Policy and Promotion (DIPP) found that the foreign direct investment from Mauritius between April 2000 and March 2011 was 41.8% of the entire amount received by India.

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