SIT On Black Money

Union Cabinet nods to constitution of SIT on black monies stashed abroad

May 28, 2014

CONSTITUTION OF SPECIAL INVESTIGATING TEAM (SIT) TO IMPLEMENT DECISION OF SUPREME COURT ON LARGE AMOUNTS OF MONEY STASHED ABROAD

PRESS RELEASE, DATED 27-5-2014

The Union Cabinet today approved constitution of Special Investigating Team (SIT) to implement the decision of the Hon'ble Supreme Court on large amounts of money stashed abroad by evading taxes or generated through unlawful activities.

The SIT will be headed by Hon'ble Mr. Justice M.B. Shah, former Judge of the Supreme Court as Chairman and Hon'ble Mr. Justice Arijit Pasayat, former Judge as Vice Chairman.

The Members of the High Level Committee will comprise:

i.		Secretary, Department of Revenue
ii.		Deputy Governor, Reserve Bank of India,
iii.		Director (IB),
iv.		Director, Enforcement
v.		Director, CBI
vi.		Chairman, CBDT,
vii.		Director General, Narcotics Control Bureau
viii.		Director General, Revenue Intelligence
ix.		Director, Financial Intelligence Unit
x.		Director, Research and Analysis Wing and
xi.		Joint Secretary (FT&IR-1), CBDT

The SIT has been charged with the responsibility and duties of investigation, initiation of proceedings and prosecution in cases of Hasan Ali and other matters involving unaccounted money. SIT shall have jurisdiction in the cases where investigations have already commenced or are pending or awaiting to be initiated or have been completed. SIT will prepare a comprehensive action plan including creation of necessary institutional structure that could enable the country to fight the battle against unaccounted money. The SIT should report to the court the status of work from time to time.

Black money probe: SIT to hold first meeting in June-Indian Express

The first high-level meeting of the Special Investigation Team (SIT) on the issue of black money and special probe into cases of unaccounted funds stashed away abroad by Indians will be held in New Delhi on June 4th.

Officials said the Department of Revenue under Finance Ministry has issued invitations to all the 11 members of the SIT after obtaining the consent of the Chairman and retired Supreme Court Judge M B Shah and Vice Chairman Justice (retd) Arijit Pasayat for convening the meeting.

The first meeting will be held on June 4th and all the members have been asked to participate, official sources said.

The government notified the SIT on May 27 after the Supreme Court had granted it one week to constitute the high-profile team comprising top bosses of country’s premier investigation, enforcement and intelligence agencies.

The meeting, the sources said, is expected to discuss the policy matters on combating the menace of black money and the status of ongoing probes and available inputs with all the departments in this regard.

The officers who would form part of the SIT include Secretary of the Department of Revenue under the Ministry of Finance, a Deputy Governor of RBI, Intelligence Bureau Director, Director of Enforcement Directorate, Director CBI, CBDT Chairman and Director General Narcotics Control Bureau.

DG Directorate of Revenue Intelligence, Director Financial Intelligence Unit, Secretary Research and Analysis Wing and Joint Secretary (Foreign Tax and Tax Research) in the Finance Ministry will be its other members.

The terms of reference for the SIT stipulate that it “shall have jurisdiction over all the cases, where investigation has already commenced or pending or awaiting to be initiated or have completed” with regard to instances of black money and illicit funds generated and sent to overseas destination and tax haven nations.

The SIT, the terms of reference said, “shall report to the Court and shall inform the Court of all major developments by filing periodic status reports from time to time and for this purpose, the Union of India shall accord all the necessary financial material, legal, diplomatic resources both inside and outside the country to the SIT”.

The Union Cabinet notified the designations of the members of the government agencies that would constitute the SIT after it held its first meeting on May 27.

“In the first Cabinet meeting of the new government…in the light of the directions of the SC, we have constituted an SIT for unearthing black money…This was an important issue for us,” Law Minister Ravi Shankar Prasad had told reporters after the meeting.

A government statement later said the SIT has been entrusted with the “responsibility and duties of investigation, initiation of proceedings and prosecution in cases of Hasan Ali and other matters involving unaccounted money.”

Link Indian Express

GDP: Revival on cards; GDP growth seen at 6% in FY15

India’s GDP growth for FY14 came in at 4.7%. This is lower than the government’s advance estimate of 4.9% growth and only slightly above 4.5% growth in FY13. Q4FY14 failed to see any revival in industry and services, and GDP growth was in fact lower in the second half of FY14 at 4.6%, compared to 4.9% in the first half of FY14. Financial / business services and agriculture

drove growth in FY14 while manufacturing continued to be a laggard. Of late, there has also been an uptick in mining and utilities (due to higher electricity production). On the demand side, net exports contributed to more than half of GDP growth because of a fall in imports and an increase in exports.

In FY15, under the assumption of normal monsoon, we expect GDP growth to rise to 6%. This will be led by higher industrial growth driven by infrastructure projects, many of which were cleared last year. But if monsoons fail – the Indian Meteorological Department has assigned 60% chance of El Nino phenomenon occurring this year - GDP growth could be lower, at 5.2%.

Where is growth looking up?

 Agriculture: A good monsoon pushed agriculture growth to 4.7% in FY14; total foodgrain production rose nearly 3%. However, current climate forecasts indicate increased likelihood of a deficient monsoon in FY15 that could affect agriculture production.

 Financial, insurance, real estate and business services: This sector contributed more than half of the overall GDP growth in FY14 although, in terms of size, it is only 20% of the economy. It grew by 13% on the back of a rise in business services exports and aided by a pick-up in bank deposit and lending growth in H2FY14 (following a surge in non-resident deposits). Improving global prospects could continue to favour this sector in FY15.

Electricity: Electricity production rose to 961.5 billion units (BU) in FY14 from 907.2 BU in FY13 mainly on account of capacity additions (nearly 38 GW) over the past 2 years. CRISIL Research expects electricity production to grow by 4-5% in FY15 due to capacity additions (around 11 GW) as well as a marginal increase in PLFs led by an improvement in coal supply.

 Mining: The sector has gathered pace in recent months; fall in output was lower at 0.8% in H2FY14 compared to 2% in H1FY14. Mining output is expected to pick up in the coming quarters due to the lifting of the regulatory ban on mining in Karnataka and Goa. Prior to the mining ban, these two states accounted for 4-5% of the country’s mining output. Mining ban in other major mining states with significant share in the country’s output – Andhra Pradesh and Chhattisgarh (about 13% each), Odisha (10%), and Gujarat and Madhya Pradesh (about 8% each) – is still awaiting resolution. Fast-tracking decisions in this sector will immensely benefit these states and improve the overall availability of mineral resources.

 Net exports: A 2.5% fall in imports and 8.4% growth in exports improved the net export position and contributed 54% to overall growth in FY14. Although the continued global recovery will support growth in exports, the net export position will be less favourable in FY15 as imports will pick up gradually in line with domestic growth  

Where is growth still lagging?

 Trade, hotels, transport and communication: Accounting for nearly 27% of the economy, this sector is almost entirely driven by demand from the private sector and has been facing the wrath of declining consumption and investment demand as well as the spillover effects of sulking industrial growth. In FY14, the segment grew by 3% compared to 5.1% in FY13 however growth saw some revival in the second half of FY14.

 Manufacturing: The sector, which is 16% of the economy, continued to suffer as output fell 0.7% in FY14 as the impact of weak domestic demand outweighed the benefit from rising exports. Private consumption growth was higher in the H2FY14 possibly reflecting better farm incomes, but growth for the full year was low at 4.8%. High inflation and weak income prospects dented

consumer sentiments. Investment growth fell by 0.4% in H2FY14 and for the full year remained flat. Investment rate therefore fell to 32.3% in FY14 from 33.9% in FY13. An improvement in investment efficiency is critical to encourage fresh investments and drive growth.