India lost $123 billion in black money in a decade: Report

IANS  BT  Washington   Last Updated: December 18, 2012  | 00:00 IST

The Indian economy suffered $1.6 billion in illicit financial outflows in 2010, capping-off a decade in which it experienced black money losses of $123 billion.
According to a report by Global Financial Integrity (GFI), a Washington-based research and advocacy organisation, India is ranked as the decade's 8th largest victim of illicit capital flight behind China, Mexico, Malaysia, Saudi Arabia, Russia, the Philippines, and Nigeria.
"While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows," said GFI Director Raymond Baker.

Titled 'Illicit Financial Flows from Developing Countries: 2001-2010', the report found that all developing and emerging economies suffered $858.8 billion in illicit outflows in 2010, just below the all-time high of $871.3 billion set in 2008-the year preceding the global financial crisis.

"Much focus has been paid in the media on recovering the Indian black money that has already been lost," Baker said, suggesting policymakers should instead make curtailing the ongoing outflow of money priority number one.

"$123 billion is a massive amount of money for the Indian economy to lose," said Dev Kar, GFI lead economist and co-author of the report with GFI economist Sarah Freitas.

FROM THE MAGAZINE: White paper on black money flawed?

"It has very real consequences for Indian citizens. This is more than $100 billion dollars which could have been used to invest in education, healthcare, and upgrade the nation's infrastructure," he said.

A November 2010 GFI report, 'The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008', found that the Indian economy lost $462 billion to illicit financial outflows from 1948 through 2008.

Authored by Kar, the report measured India's underground economy as 50 per cent of GDP, with cumulative illicit outflows accounting for an increasing share of the total underground economy.

The new GFI study also estimates the developing world lost a total of $5.86 trillion to illicit outflows over the decade spanning 2001 through 2010.

The $858.8 billion of illicit outflows lost to all developing countries in 2010 is a significant uptick from 2009, which saw developing nations lose $776.0 billion.

GFI advocated that world leaders increase the transparency in the international financial system as a means to curtail the illicit flow of money highlighted by Kar and Freitas' research.

RBI policy review: D Subbarao leaves CRR, repo rate unchanged

RBI Governor D Subbarao

BT Online Bureau    Mumbai   Last Updated: December 18, 2012  | 13:04 IST

The Reserve Bank of India on Tuesday went against the market sentiment, ignoring calls of a interest rate cut from the industry and experts alike in its mid-quarter monetary policy review.

Buoyed by a fall in inflation figures in November, bankers and industry leaders alike had been demanding a cut in interest rate to prop up growth and investment.

The central bank left the repo rate and cash reserve ratio (CRR) unchanged on Tuesday.

The repo rate is the rate at which it lends money to commercial banks. It was last reduced in April, by 50 basis points, to 8 per cent. CRR is the portion of deposits banks have to mandatorily park with RBI. It stands at 4.25 per cent now.

Inflation declined to 10-month low of 7.24 per cent in November from 7.45 per cent in the previous month.

The 30-share BSE Sensex traded flat soon after news of no rate cut from the RBI filtered in. The index was at 11.34 trading 0.34 points in red at 19,244.04.

Tata Sons appoints Cyrus Mistry as Chairman

BL : PTI :NEW DELHI, DEC 18: 2012

Tata Sons has appointed Cyrus P. Mistry as its Chairman with effect from December 28 following the retirement of Ratan N. Tata.

“The board of directors of Tata Sons today announced the appointment of Cyrus P. Mistry as the Chairman of the board after Ratan N. Tata retires on December 28, 2012,” Tata Sons said in a statement today.

The board has decided to confer on Tata the honorary title of Chairman Emeritus, it added.

Mistry has been a director of Tata Sons since 2006 and was appointed Deputy Chairman in November last year.

Earlier this month, Tata Motors had appointed Mistry as its Chairman with effect from December 28 after the retirement of group chief Tata. Mistry has also been appointed as the Chairman of Tata Steel and Tata Chemicals.

Last month, Ratan Tata had stepped down as the Chairman of Tata Global Beverages, making way for Mistry, who was also inducted into the board of Indian Hotels Company. Tata Consultancy Services had inducted him as Deputy Chairman.

Tata Sons is the promoter of the major operating Tata companies and holds significant shareholding in these firms.

About 66 percent of the equity capital of Tata Sons is held by philanthropic trusts endowed by the members of the Tata family.

It owns the Tata name and several Tata trademarks, which are registered in India and around the world.

Management Tip of the Day - Be Assertive While Being Yourself

HBR ; 18 Dec 2012

If you’re reserved, you’ve likely been told you need to be more assertive at work. 

But if that’s not your natural style, how can you still ask for what you need and get what you want? 

Here are three ways: 

• Start with a success inventory. To understand when your style is effective or not, spend a week assessing your success. Before a meeting, ask yourself, "What do I want?" Then, afterwards, evaluate the results.
• Set small goals. Challenge yourself with a specific goal. For example, give yourself a week to initiate three difficult conversations with colleagues. Or promise that in group discussions for the next month, you'll speak up within the first two minutes.
• Build relationships. If you hold back because you’re uncomfortable with your co-workers, consider interacting more with colleagues outside of work so that you feel more at ease speaking up.

Adapted from “How to Be Assertive (Without Losing Yourself)” by Amy Gallo.

Negative List of Services Exempted from Servivce tax w e f 1st july 2012,

Service Tax notification :18 Dec 2012

(a)  Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere:

 (i)  services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government;

(ii)  services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;

(iii)  transport of goods or passengers; or

(iv)  support services, other than services covered under clauses (i) to (iii) above, provided to business entities.

(b)  Services by the Reserve Bank of India.

(c)  Services by a foreign diplomatic mission located in India.

Any service that is provided by a diplomatic mission of any country located in India are in the negative list. This entry does not cover services, if any, provided by any office or establishment of an international organization.

(d)  Services relating to agriculture by way of -

 (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or seed testing;

(ii)  supply of farm labour;

(iii)  processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter essential characteristics of agricultural produce but make it only marketable for the primary market;

(iv)  renting or leasing of agro machinery or vacant land with or without a structure incidental to its use;

(v)  loading, unloading, packing, storage or warehousing of agricultural produce;

(vi)  agricultural extension services;

(vii)  services by any Agricultural Produce Marketing Committee or Board or services provided by a commission agent for sale or purchase of agricultural produce.

(e)  Trading of goods.

(f)  Any process amounting to manufacture or production of goods.

(g)  Selling of space or time slots for advertisements other than advertisements broadcast by radio or television.

(h)  Service by way of access to a road or a bridge on payment of toll charges.

(i)  Betting, gambling or lottery.

(j)  Admission to entertainment events or access to amusement facilities.

(k)  Transmission or distribution of electricity by an electricity transmission or distribution utility.

(l)  Specified services relating to education–

 (i)  pre-school education and education up to higher secondary school or equivalent;

(ii)  education as a part of a curriculum for obtaining a qualification recognized by law;

(iii)  education as a part of an approved vocational education course.

(m)  Services by way of renting of residential dwelling for use as residence;

(n)  Services by way of –

 (i)  extending deposits, loans or advances insofar as the consideration is represented by way of interest or discount;

(ii)  inter se sale or purchase of foreign currency amongst banks or authorized dealers of foreign exchange or amongst banks and such dealers;

(o)  Service of transportation of passengers, with or without accompanied belongings, by–

 (i)  a stage carriage;

(ii)  railways in a class other than –

(A)  first class; or

(B)  an air conditioned coach;

(iii)  metro, monorail or tramway;

(iv)  inland waterways;

(v)  public transport in a vessel of less than fifteen tonne net, other than predominantly for tourism purpose; and

(vi)  metered cabs, radio taxis or auto rickshaws;

(p)  Services by way of transportation of goods –

 (i)  by road except the services of –

(A)  a goods transportation agency; or

(B)  a courier agency;

(ii)  by an aircraft or a vessel from a place outside India to the first customs station of landing in India; or

(iii)  by inland waterways;

(q)  Funeral, burial, crematorium or mortuary services including transportation of the deceased.

Soiled, mutilated and imperfect banknotes

Cut piece Note of Rs.100/-.


What are soiled, mutilated and imperfect banknotes?

How & where it can be exchanged ?

Simpletaxindia :Dec 18,2012


The Reserve Bank of India on Tuesday left its key policy rate unchanged in its mid quarter (December 2012) monetary policy. With this status quo in the policy action, repo rate stood at 8% while reverse repo was at 7%. Cash reserve ratio (CRR) or the portion of deposits banks keep with the RBI was also remained at 4.25%.

What are soiled, mutilated and imperfect banknotes?

(i) "soiled note:" means a note which, has become dirty due to usage and also includes a two piece note pasted together wherein both the pieces presented belong to the same note, and form the entire note.

(ii) Mutilated banknote is a banknote, of which a portion is missing or which is composed of more than two pieces.

(iii) Imperfect banknote means any banknote, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated banknote.

Can soiled and mutilated banknotes be exchanged for value?

Yes. Such banknotes can be exchanged for value.

Where are soiled/mutilated banknotes accepted for exchange?

All banks are authorized to accept soiled banknotes for full value. They are expected to extend the facility of exchange of soiled notes even to non-customers. All currency chest branches of commercial banks are authorised to adjudicate mutilated banknotes and pay value for these, in terms of the Reserve Bank of India (Note Refund) Rules, 2009

How much value would one get in exchange of soiled banknotes?

Soiled banknotes are exchanged for full value.


Torn Notes of Rs.10/-

How much value would one get in exchange of mutilated banknotes?

A mutilated banknote can be exchanged for full value if,

(i) For denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20, the area of the single largest undivided piece of the note presented is more than 50 percent of the area of respective denomination, rounded off to the next complete square centimeter.

(ii) For denominations of Rs. 50, Rs.100, Rs. 500 and Rs. 1000, the area of the single largest undivided piece of the note presented is more than 65 percent of the area of respective denomination, rounded off to the next complete square centimetre.

Banknotes in denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20, cannot be exchanged for half value.

A mutilated banknote in denominations of Rs.50, Rs.100, Rs.500 or Rs.1000, can be exchanged for half value if,The undivided area of the single largest piece of the note presented is equal to or more than 40 percent and less than or equal to 65 percent of the area of respective denomination, rounded off to the next complete square centimetre.

How much value would one get in exchange of imperfect banknotes?

The value of an imperfect note may be paid for full value / half value under rules as specified for mutilated notes if,

(i) the matter, which is printed on the note has not become totally illegible, and

(ii) it can be satisfied that it is a genuine note.

Notes of Rs.500/- and Rs.10/- joined with cello tape.

What types of banknotes are not eligible for payment under the Note Refund Rules?

The following banknotes are not payable under the Reserve Bank of India (Note Refund) Rules 2009.

A banknote for which:
the area of single largest undivided piece of note presented is less than or equal to 50% of area of the note for denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20.
the area of the single largest undivided piece of the note is less than 40 percent for denominations of Rs.50, Rs. 100, Rs. 500 and Rs. 1000.
A banknote which:
cannot be identified with certainty as a genuine note for which the Bank is liable under the Act,has been made imperfect or mutilated, thereby causing the note to appear to be of a higher denomination, or has been deliberately cut, torn, defaced, altered or dealt with in any other manner, not necessarily by the claimants, enabling the use of the same for making of a false claim under these rules or otherwise to defraud the Bank or the public,\
carries any extrinsic words or visible representations intended to convey or capable of conveying any message of a political or religious character or furthering the interest of any person or entity,
has been imported into India by the claimant from any place outside India in contravention of the provision of any law.

What if a banknote is found to be non-payable?

Non-payable banknotes are retained by the receiving banks and sent to the Reserve Bank where they are destroyed.