Indians declared more than $500 million (£330m) in black money, the government announced on Thursday (1), a fraction of the total amount feared hidden, as a deadline for coughing up assets hidden from the taxman expired.
Prime minister Narendra Modi took power last year pledging to crack down on black money, a systemic problem in India that sees billions of rupees hidden in foreign bank accounts or funnelled into property abroad.
The finance ministry said more than 600 tax evaders had made declarations by midnight on Wednesday, when a three-month window for unveiling stashes and avoiding prosecution ended.
The ministry said “638 number of declarations have been received under the compliance window declaring undisclosed foreign assets,” amounting to Rs 37.7 billion ($574m).
The government has announced a string of measures to crack down on black money, including a 10-year jail term for evaders who get caught from now on.
But Ashutosh Kumar Mishra, executive director of Transparency International in India, doubted whether the government could find the money offshore given how deeply entrenched the phenomenon has become.
“It’s not easy. You need a set of clear reforms and determined political will and it will take years,” Mishra told reporters.
India is one of the most cash-intensive societies in the world, corruption is endemic, and strict tax laws encourage people to keep money off the official books.
Estimates of Indian black money abroad vary widely. Some $439bn (£290bn) left the country illicitly from 2003-2012, according to estimates from the Global Financial Integrity group in Washington.
The wealthy channel money to tax havens such as Switzerland or Singapore, convert it into jewellery, antiques, paintings or property, or send a relative abroad for half the year to avoid tax.
Only 2.89 per cent of Indians pay any income tax at all, India’s previous finance minister told parliament in 2013.