Topping The List

The budget was just declared a few days ago and knowing very little of it, it was a different topic that caught my attention in the budget this time. It was this aspect called the ‘fiscal deficit’.

FISCAL DEFICIT: When a government's total expenditures exceed the revenue that it generates (excluding money from borrowings). Deficit differs from debt, which is an accumulation of yearly deficits. Fiscal deficit gives the signal to the government about the total borrowing requirements from all sources.

Many rating agencies (companies that assess financial strength of companies and governmental entities) have noted that the government might struggle to achieve its fiscal deficit target for 2011-2012 which is of 4.6% due to the increasing prices of crude oil and other commodities. Now, our finance minister, Pranab Mukherjee has although continued his confident stand on fiscal deficit by stating that, "There are some people who have expressed some doubts over fiscal deficit target, but I can assure you they need not worry over numbers." All thanks to the various spectrum sales that have happened in the country in the current year (never mind the corruption being dealt with there!)

So after that, we come to another interesting topic called ‘black money’ Though, I am sure you’d know what it is, but still, just to get the picture straight, black money is, unaccounted-for and untaxed cash generated by dealings in a black economy, black market, or organized crime.

The topic of black money stashed away in tax havens of Swiss banks are a hot topic. And why shouldn’t it be? The amount stored in Indian accounts in the Swiss banks is a stark irony to 41% of India’s population which is slated to be below the international poverty line.

According to the data provided by the Swiss bank, India has more black money than rest of the world combined. India topping the list with almost $1500 Billion black money in Swiss banks, followed by Russia $470 Billion, UK $390 Billion, Ukraine $100 Billion and China with $96 Billion.

Let’s not get into how shameful a situation it is for India to top a list of this sort, the fact remains it is the MOST RICHEST COUNTRY in sense of its BLACK MONEY. Now this is an amount which is 13 times larger than the nation’s foreign debt.

Getting this equation straight, our current fiscal deficit (which is our excess in expenditure over revenue generated) is rupees 3.5 lac crore and the amount in Swiss banks is approximately rupees 64 lac crores.The subtraction is easy even for a person like me. The total black money accounts for 40% of GDP of India, and keeping all political aspects aside, it just makes sense to get back this cash and free ourselves of various debts that we are under, provide OUR people some basic amenities (afterall, the politicians owe them that!) and decrease the bad name that we have earned in the global circle.