Where Has All The Money Gone?

Money makes the mare go, and it seems to have gone. From 2012 through 2014, overseas investment by Indians grew by an astonishing 700 per cent in the British Virgin Islands, a favourite tax haven for the biz pashas with the big bucks. Inexplicable, after Narendra Modi—whose war was to bring black money back to India—came to power, the amount fell to Rs 611 crore from Rs 18,015 crore. British Virgin Islands witnessed huge capital investment by Indians between 2012 and 13.

Interestingly, this was the period when the UPA regime was facing the heat from Opposition parties and social-political activists to prosecute those responsible for moving ill-gotten money into offshore accounts. The finance ministry recently revealed that approximately $425 million (Rs 2,709 crore) was invested by Indian companies in British Virgin Islands during 2012-13 using the legitimate route of capital investment, including equity, loan and guarantee, invoked.

The very next year, the amount rose by 700 per cent and $2,827.21 million (Rs 18,015 crore) was moved to British Virgin Islands through legitimate route of Overseas Direct Investment (ODI). However, the ODI dipped to merely $96.21 million (Rs 611 crore) after NDA II stormed to power.

According to Department of Economic Affairs, the government has taken several steps in the last three years to promote capital investment in foreign countries. It said the ODI under the automatic route which was reduced on August 14, 2013 from 400 per cent of the net worth of the Indian Party to 100 per cent was restored back to the level of 400 per cent in July 2014. The total investment under the automatic route was capped at $1 billion in a financial year. Investment made by individuals or other entities may not have broken the law or acted improperly to hide details, the details of investment made in famous tax haven countries or countries with little to offer besides registration of mail box entities are indeed intriguing.