New measures to seize the assets of “big time offenders” who escape abroad to avoid penalties are being considered, Finance Minister Arun Jaitley said today, after tycoon Vijay Mallya left for Britain last year owing over $1 billion (over Rs. 6,000 crore) to a group of banks, many of them state-run.
“In the recent past there have been instances of big time offenders — including economic offenders — fleeing the country to escape the reach of the law. We have to ensure the law is allowed to take its course,” the minister told Parliament while presenting the government’s Budget for the coming year.
“The law will have constitutional safeguards and the assets in India would stand confiscated until the person submits himself or herself to the law,” he said, without expanding on the proposal or referring to specific cases.
Mr Mallya has refused to return home from England despite repeated efforts by India’s financial crimes agency to question him. A court last month ordered a consortium of banks to start the process of recovering roughly $1 billion in loans given to Mr Mallya’s Kingfisher Airlines which ended operations in 2012, grounded by vast debt and unpaid salaries to its staff.
The government has declared a crackdown on corruption and undeclared wealth or black money to try to increase tax revenue and weaken the thriving underground economy. Prime Minister Narendra Modi’s shock decision in November to remove high-value banknotes from circulation was meant to bring billions in undeclared money back into the formal system.
But critics and experts both point out that undeclared or untaxed wealth is not held in cash but funneled to tax havens such as Switzerland or Singapore, or invested in assets like jewellery and real estate.
India has run amnesty schemes to try to lure back ill-gotten gains held abroad, but this new proposal would target assets at home to apply pressure to financial criminals.