G20 Summit- November 2014

Relevance of G20 Summit

15 November 2014 (All India Radio - News Analysis)

S J Muni, Former Diplomat and Sanjay Thapar, Senior Journalist

GIST:

Various issue need to be tackled in urgent manner – Indian PM – concept of repatriating Black money. Present situation of Russian belligerence – whether consensus in the summit?

-          G20 is global economic issues whereas Russian & Ukraine issue may rise in important Political sense. European union wants answer from Russia – Sensitive issue in EU context; Russia – naval ships – around Australia; is it a revival of Cold war; Multilateral cooperation with Russia, India’s View point – also Russia part of BRICS.

Black money issue – money circulating in the International market – Bringing back Black money – any progress in that direction?

-          Perception of G20 – conceived when the western economies sliding down – Russia, Brazil, South Africa were growing very fast; G8 western summit forum expanded; it contribute 85% of the Global Economy; Issues highlighter by Australia – MNC – transfer profit to Tax haven – financial arrangement must be brought into the matter.

Climate change issues at the Summit

-          Those Emitting more, takes very less step to control the emission; India & china are being pressurized; US & China – Recent restriction on Emission; Developing countries demand Technological support from the western countries; US to cut 28% of Emission, China, beyond 2020-30 no rise in emission; Recalibrating Indian position to be more Objective;

Global Economic Recovery, since 2008 US Crisis;

Continuing Joblessness, India excluded from the aftermath of the crisis. So Easing out and progressing Job-full growth?

-          No growth in the west – Projections EU 0% growth, US- growth comes down affecting job market. All efforts targeted at Productivity of these economy – Global GDP need to be increase to 2% - Manufacturing & Infrastructure emphasized; Percolation of Growth to the down 20% - Uplift the people - Distribution of the profit;

Job-full growth in India – PM pushing forward ‘Make in India’ Campaign at various forum– Any Progress or whether concept materialized at the Summit?

-          Though it is not agenda in this summit, campaign is emphasized in Bilateral talks; Increase productivity – skills, zero pollution; harnessing mobilizing maximum investment; G20 – provided an opportunity to meet 20 leaders of world economy – appealing them to invest in India;

Indian PM meet French president – Bilateral talk – Issue of Smart Cities & Energy Sector – Indo France Collaboration;

-          With China, Australia, US (TFA, Food Security, Bali Package), earlier with Myanmar;  

Chinese presence – Australian country & Pacific – compete with India

-          China – recognized economy – But the level of appeal is in different context; Australia’s Modi fever, Fiji with more Indian Population - India have greater advantages, though in economic promises China is far ahead of us;

 This came to you in the program News Analysis produced & presented by News services division on All India Radio.

Black money issue at G20 forum

17 November 2014

E C Gupta, former Finance Secy., and Sanjay Jha, Indian Bureau Chief, ITN news London

PM Modi stated that Indian support all Initiative which facilitate automatic exchange of information that ultimately helps in tracing unaccounted money and eventual repatriation;

Steps taken in India – List of Names in Supreme Court, Special Task force; how do you look this statement of PM?

-          Raising the issue in such forum – making other countries aware of the issue – pushing the importance;

-          Many Asian countries face this problem – which demand Transparency, Automatic exchange of information, coordination among the countries;

-          Resolution in G20 forum will do nothing. It requires agreement between countries; India has initiated Information Exchange Agreement/ Tax Information Exchange with 13 countries.

Policy coordination between major economies - G20 countries contributes 80% of Global Economy – Forum can unearth Black Money – will discussion & forum bring together;

-          International Pressure builds up on Tax haven Monaco, Cayman Island which are small jurisdiction – Economy survives on this – Eg. Mauritius (Post Box Companies); At least Tax Information can be shared with this international pressure; Tax realization can be possible; Illegal activities – Terror funding, gambling can be checked;

New Global Standard on Automatic exchange of Information – Instrument for unaccounted money in Tax havens; will this be possible?

-          International Convention mandatory to be followed; Problem in India is Double Taxation Agreement signed before 2009 ( No international standard at that time); Tax Information aide the Tax Authority to trace unaccounted money;

Possibility of Revoking the Agreement like DTAA - then go for Information sharing?

-          DTAA is legitimate and is different – prevent a person from paying tax in two countries; If used for purpose of Avoiding tax – this cannot be justified; Information Agreement is different and DTAA countries can also come in to Information Sharing;

Drug trafficking, Arms smuggling, Terror financing, - hitting the Black money – need for close coordination between developed, developing and small countries; will the small countries Tax Haven understand the importance of the concerns of the country like India?

-          G20 Communiqué mentioned about it; detrimental to the development of any country;

Increased Mobility of capital and Technology – opportunity for avoiding Tax and profit shifting – India Special treaty - BEPS (Base Erosions and Profit Shifting) –would address these concerns?

-          BEPS – Transfer pricing – International standard – TP also used as Tax avoiding method;

What was the Reaction of other countries, regarding the issue of Black money, which Indian PM raised in ASEAN, BRICS forum earlier?

-          Issue common in Asian and surrounding countries; Now political dimension given to the issue – In India, Domestically given priority;  curb the black money within the country( curb the source);

“India’s Domestic black money is greater than that of outside” – Real Estate prevalence of Black money – Some sector where cash transactions is not part of National Economy. Can this thing be streamlined?

-          Opening up of  Economy -In 2003-04, Indian allowed purchase country abroad, citizens allowed to buy properties abroad, no restriction on Remittance; Opening up make it difficult to identify or trace the money flow; No inspector for the Real estate sector which is more fragile sector– destination for most of the illegal money & tax evader; Transparency and Tax enforcement are very essential; 

 This came to you in the program News Analysis produced & presented by News services division on All India Radio.