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THIS JOURNAL WILL "TELL IT LIKE IT IS" REGARDING DIFFERENT FORMS OF ENERGY AND THEIR GLOBAL IMPLICATIONS/PROBLEMS

INDIA TAX EVADERS IN THE CROSSHAIRS OF P.M. MODI VS THE SWISS CONNECTION

13 JUN 2014

On 27 May 2014, India’s ’s new Prime Minister (P.M.) Narendra Modi on one of his first acts (on his first day in office), was to make it a priority to recover billions of dollars (in Ruppies) stashed overseas to avoid taxes. P.M. Modi immediately created an investigative team of former judges and current regulators to find the concealed financial assets, known in India as black money”, to return them home. At stake is what’s estimated to be as much as $2 trillion, more than India’s annual gross domestic product. P.M. Modi enthusiastically said: “It will send out a loud and clear signal to all tax evaders” But will it?

ARUN KUMAR, AUTHOR OF THE BOOK “THE BLACK ECONOMY IN INDIA” and an economics professor at Jawaharlal Nehru University in New Delhi, calculated the $2 trillion figure said: “There was always a lack of political willpower, and I hope it will be different this time. India is joining countries including the U.S. and Britain in cracking down on rich people who haven’t reported offshore funds”. India ranked third in the world (for money illegally moved overseas in 2011), behind China and Russia. According to Kumar, India (Asia’s third-largest economy) loses an estimated 60 trillion rupees ($1 trillion) each year from its formal sector, such as banks, and almost 6 trillion rupees of that is moved out of the country, Kumar analyzed independent studies and World Bank and International Monetary Fund data on trade flows. His $2 trillion estimate is the total amount Indians currently have stashed abroad illegally, without paying taxes or disclosing the funds to authorities. Kumar added: Tax revenue on those assets could exceed $600 billion, based on a 30 % rate plus penalties, that’s six (6) times the amount India’s federal government estimates it will need to borrow this year to meet expenses. India’s (GDP) yearly fiscal deficit will widen this year to the highest among BRIC countries (Brazil, Russia, India and China) — in part, because taxes, as a proportion of GDP are low.  A May 29 International Monetary fund (IMF) estimate showed. “The black money within the country is easier to get at than that stashed abroad…Probing money moved abroad is a rather convenient way of diverting public attention from addressing the larger issue of unaccounted money within the country”- Well…maybe.

SEPARATELY, IN A 2013 REPORT BY “GLOBAL FINANCIAL INTEGRITY”, a Washington-based group researching cross-border money transfers, said that high-net-worth individuals, and private companies are the “primary drivers of illicit (money) flows”. Indians had moved $644 billion to tax havens as of 2011, according to their estimates. (note the wide variance with Arun Kumar’s estimates). One has to wonder if this organization is on the payroll of the tax evaders, and only trying to minimize the extent of the problem.

INDIA’S PRESIDENT Pranab Mukherjee TOLD LAWMAKERS ON 13 JUN 2014, that India will proactively engage with overseas governments to hunt black money, while outlining goals of the two-week-old government, which is also seeking to stimulate economic growth, curb inflation, simplify investment rules and abolish obsolete laws. The government defines black money as assets that haven’t been reported to authorities at the time of their generation or disclosed at any point during their possession. A large portion is converted into gold and held in households domestically. It’s legal for Indian residents to hold money in foreign bank accounts as long as they disclose it and pay taxes.

P.M. MODI’S SPECIAL INVESTIGATIVE TEAM, Will Focus On The Black Money held In Offshore Accounts, and was set up to comply with a Supreme Court directive. The new investigative panel headed by M.B. Shah, a former judge in India’s top court, who has yet to figure out its scope and methods. The panel held its first meeting on 2 Jun 2014, and decided on a “road map” for implementing the court order, according to a government statement.

ENTER: THE SWISS CONNECTION Paulson-Ellis, who used to run the Bank of India business’, said: “This is a particularly good time to collaborate with international agencies chasing unaccounted cash…Private banking systems are being exposed and forced to share client details with U.K., U.S., EU and Swiss authorities. If India can be a part of that dialog, it will get better access to information than was possible historically…P.M. Modi, needs to back words with action”. But …Ellis is now co-head of “Global Emerging Business” at Banco Espirito Santo SA (Inc) in London, so how sincere can he be? Question is: Is he a part of the problem? or, a part of the solution?

SWISS SAY “HSBC does not condone,” the bank said (in an e-mailed response) last week.  Mario Tuor, a spokesman for Switzerland’s State Secretariat for International Financial Matters in Bern, said: “Individuals are responsible for their own tax affairs”. Adding that his government can only cooperate within the framework of Swiss law, and it doesn’t allow cooperation based on stolen data, referring to data stolen in 2011 by a former Bank employee. See there!- our hands are tied – Sure, we know!

TAX HEAVENS Switzerland, Liechtenstein and the British Virgin Islands were among tax havens where illegal funds were stashed, A.P. Singh, then director of India’s Central Bureau of Investigation, said in 2012.that Indians were reported to be the largest depositors in Swiss banks, without providing details.

Siamak Rouhani, an official at the Swiss embassy in New Delhi, said on Jun 2014 (in an e-mail):“Switzerland understands and shares India’s wish to fight tax evasion and is committed to complying with the relating international standards”- Yes, we know!- carefully worded language that only seeks to obscure the facts.

SOME INDIANS ARE SKEPTICAL ABOUT RECOUPING THE BLACK MONEY. According to Ashutosh Kumar Mishra, New Delhi-based Executive director of “Transparency International India” (a group that monitors corporate and political corruption) said India needs to raise the issue in international forums and put pressure on foreign banks to disclose information about those who are evading taxes through their branches, he said. “The problem of black money cannot be solved in a day…Lack of proper implementation is what has derailed all well-intentioned announcements like this”  Others said…

Bizay Sonkar Shastri, a spokesman for the BJP (Party) said: “The few steps the previous Congress government had initiated was all eyewash…It’s a priority for us, and we will pursue it with all sincerity and seriousness…Unaccounted money reduces the tax base and the ability of the government to tackle the fiscal deficit.

Ashima Goyal, a member of a panel that advises the Bank of India on monetary policy said:“This probe team is very timely. It can also draw upon international treaties drawn up for this”.

MONEY TRANSFERS THRU “HOOK OR CROOK”- hawala. Some undisclosed money is moved out of the country through the global transfer system known as hawala The system is based on trust or family connections and can involve mispricing of goods, financial loopholes and hidden accounting procedures to deliver cash in one country and pick it up in another. Using hawala is illegal in India. Shell companies (in paper only) are set up Tax Heavens to route some of the cash back to India by investments in stock markets, through participatory notes, foreign direct investments, and other instruments. We suppose that is also a method of “spreading the wealth”.

Thanks to Bloomberg for their 13 Jun 2014 story

OUR TAKE AND COMMENT

We said it before. Switzerland Banks are the key to world-wide corruption, and fraud. Our previous article on this subject dealt with USA banking firms doing business with their Swiss counterparts to evade paying taxes for earnings in the USA. Unfortunately, either by USA Internal Revenue System (IRS) collusion, or their legal inability to prosecute such slick trans-national banks, the tax evaders got away by paying a few cents on each dollar, and then only against those tax evaders who surfaced then.

In May 2014 India’s new prime Minister Modi started his tenure by declaring war on those who stashed profits overseas to avoid taxes by appointing a new Investigative Panel headed by Mr. M.B. Shah, a former judge in India’s top court; Unfortunately, he too seems to be scratching his head, wondering how to successfully recoup monies owed to the Indian government by these super-slick tax evaders who are making it very difficult to defray India’s governmental expenses. It seems quite clear Mr. Shah, and other judges/businessmen, in India agree that the Swiss connection is deeply involved. Problem is: How to “pin the tail on the donkey”. Many fear that P.M. Modi’s initiative may be not really “A loud and clear signal” to tax evaders, but rather “political-posturing” so that he may later say: Well…we tried from day one. The proof to his strength of purpose will be the resolve he shows in the days to come. We wish him the best!An anecdote: A man said to another: “I never turn on the light in the kitchen at night, because the roaches all come out”.  HMM! No wonder it is “lights out” in India too.

Edward Oliver Gonzalez (gonzedo)

e-mail > gonzedo@yahoo.com

RELATED ARTICLES: THE SWISS CONNECTION – KEY TO WORLD-WIDE CORRUPTION AND FRAUD    Feb 2014 http://energymaters.com/?p=1429


June 13, 2014 at 7:46 PM Comments (3)

USA EPA ADMINISTRATOR “TELLS IT LIKE IT IS” TO FOSSIL-FUEL FIRED POWER PLANTS, BUT…

2 Jun 2014

Washington-2 Jun 2014 – While awaiting Pres. Obama Executive Order on new EPA Regulations later today, Environmental Protection Agency Administrator (EPA) Gina McCarthy offered a blunt defense of the Obama administration’s new rule to cut carbon dioxide pollution, touting its benefits against mounting criticism from the coal industry and some members of Congress. Arguably the most important step any country has taken to combat climate change, the new rule focuses on fossil fuel-burning power plants. They account for 40% of U.S. emissions, making them the single biggest source of carbon dioxide emissions, the main driver of global warming. The proposed rule seeks to reduce power plant emissions by 30% from 2005 levels by 2030. Carbon dioxide emissions have already fallen more than 10% since 2005, which would make the effective reduction more like 15% to 17%, experts said.

On 2 Jun 2014 Speaking to a a room full of staff members, and environmental allies, at the EPA headquarters in Washington. Ms. McCarthy said: “Given the astronomical price we pay for climate inaction, the most costly thing we can do is to do nothing…There are still special interest skeptics who will cry the sky is falling. Who will deliberately ignore the risks, overestimate the costs, and undervalue the benefits. But the facts are clear. For over four decades, EPA has cut air pollution by 70% and the economy has more than tripled.”

MS McCARTHY STUCK TO THE SAME THEMES. She opened her speech with an anecdote about seeing Parker Frey, an active but severely asthmatic 10-year-old boy, on a recent trip she took to a Cleveland clinic. McCarthy said Parker’s mother lamented that on some days, the air quality is so poor that it was dangerous for the boy to play outdoors. “In the United States of America, no parent should ever have that worry,” she said. “That’s why EPA exists. Our job, directed by our laws, reaffirmed by our courts, is to protect public health and the environment. Climate change, fueled by carbon pollution, supercharges risks not just to our health, but to our communities, our economy and our way of life…Special Interests who warn of severe economic consequences of the rules have historically decried all environmental protections have cried wolf to protect their own agenda. And time after time, we followed the science, protected the American people, and the doomsday predictions never came true. Now, climate change is calling our number. And right on cue, those same critics once again will flaunt manufactured facts and scare tactics.”

The EPA has proposed individual state targets based on each state’s fuel mix, with coal states starting and ending at a higher emissions level than those that use more of cleaner-burning natural gas and renewable (green energy). The states can then pick from a menu of options in order to achieve the cuts. The Obama administration has long held that combating climate change is about protecting public health and economic growth, and to underscore that, the president will make his own comments later in the day in a press call with the American Lung Assn.

SENATE MINORITY LEADER MITCH McCONNELL, himself from the coal-heavy state of Kentucky, called the new regulations: “a dagger in the heart of the American middle class.” Before the rules came out, the U.S. Chamber of Commerce said it would cost the economy $50 billion annually and hundreds of thousands of jobs. We suppose that is what Ms. Gina McCarthy was talking about when she said: “same critics once again flaunt manufactured facts and scare tactics”.

Thanks to the LA Times for their timeliness and excellent quotations.

OUR COMMENTS

We were happy to see the EPA administrator sound emboldened by Pres. Obama’s use of Executive Powers to bring Fossil-fuel fired power plants to the realization that their days of wantonly polluting our air/water always, placing profit above the health of our citizens, are at an end. BUT! this proposed plan is just hoopla, and EPA CYA propaganda. Ms. McCarthy talks the talk, but does not walk the walk!

After reading the new 2030 Plan Proposal > http://www.whitehouse.gov/climate-change  I’ve come to the conclusion that EPA has an excellent grasp of the primary polluters, where they live , and how bad they are (they have always known), Problem is: EPA IS NOT YET MANDATING ACTION ON A SPEEDY TIMELINE. Hence they are once again “Proposing” pollution abatement but based on a 16 year timeline, while soliciting voluntary action “By 2030”. Why? no boy! that is too little too late!

Letting each State seeking its own solutions is “pie in the sky”. Hell! here in Texas ( the country’s worst air polluter) not a darn thing will happen because the offenders own the State legislature, and our Governor proposed the law to make Texas independent from EPA, and to defer all such actions to the Texas Commission Environmental  Quality (TCEQ).  This proposal is ONE MORE “LOOK GOOD ACTION” by Ms. McCarthy et-al.  She promises a lot, but delivers little. Ms. McCarthy should be replaced ASAP. We have recommended that many times in the past.

We expected President Obama to provide serious and specific action concomitant with his Executive Powers, but he wasted a wonderful opportunity to bring about swift action. Pre. Obama had public opinion, the supreme court, and Executive Powers under the Clean Air Act (a trifecta); hence the obligation to take meaningful action, and he squandered the opportunity; Further, by even failing to make the announcement himself, after promising to do so, he opened himself to Republican critics in the House, and the Senate. It is an understatement to say we are greatly disappointed. In the meantime, the Fossil-fuel industry has revved-up it propaganda machine into survival mode.  It angers us to see how gullible they think we are.

Respectfully,

Edward Oliver Gonzalez (gonzedo)

e-mail >gonzedo@yahoo.com

P.S. We are happy to announce that the month of May 2014, This publication had the largest readership in its history, and was read in 65 countries; that alone, enjoyed about 9,000 views/visits; that too was a high water-mark for our publication. Another encouraging fact is that many of our readers are “visitors” people that “make a difference”, and frequently return to look in on us. We encourage you to place our publication among your “favorites”, and look in on us from time to time; we average about two (2) posts per month. Thank you for your viewership; most specially, to viewers in other languages for tolerating the inevitable cultural translation glitches This publication attempts to “make a difference”, and modestly feel that we do.  Sometimes it may feel like that we are not making an impact on developments, but let history be the judge of that. I am not discouraged! The truth always triumphs in the end. Thank you once again.

gonzedo

 

 


June 2, 2014 at 2:50 PM Comments (0)