India lost a whopping $123 billion in black money in 2001-2010, making it the eighth largest victim of illicit financial outflow, a US-based research and advocacy organisation said in a report.

However, India’s black money loss of $123 billion in 10 years is far less than China, which, according to the report, suffered a loss of $2.74 trillion during the same period (2001 to 2010), followed by Mexico ($476 billion), Malaysia ($285 billion), Saudi Arabia ($201 billion), Russia ($152 billion), the Philippines ($138 billion) and Nigeria ($129 billion).

India is the eighth largest victim of black money losses, said the report ‘Illicit Financial Flows from Developing Countries: 2001-2010,’ released by Global Financial Integrity (GFI). India is the only South Asian country to figure in the top 20 list of such nations.

In 2010 alone, the Indian economy suffered $1.6 billion in illicit financial outflows.

“$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.

“It has very real consequences for Indian citizens. This is more than $100 billion that could have been used to invest in education, healthcare, and upgrade the nation’s infrastructure. Perhaps last summer’s electrical blackout would have been avoided if some of this money had remained in India and been used to invest in the nation’s power grid,” he said.

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.

“Much focus has been paid in the media on recovering the Indian black money that has already been lost. This focus is for naught as long as the Indian economy continues to haemorrhage illicit money. Policymakers and commentators should make curtailing the ongoing outflow of money a priority,” he said.

(This article was published on December 18, 2012)
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