The problem of Indian money parked in foreign bank accounts is a   subject.. As it appears, the government is already working on this issue and solutions are being discussed. But bilateral relations and  international treaties  are restraining the executives to increase the pace of their efforts. We hope,  the government will augment its efforts in this direction and soon come out with its resolutions in the overall interest of Indian economy. We have a suggestion for  Government of India  about the problem of Indian Black Money, stored in Swiss Banks etc. If the Scheme suggested herein below can be applied through the Government Ordinance, the problem can be resolved in the best interest of India.


This scheme may be based on the following guidelines. The scheme primarily offers foreign account holders to repatriate funds back to India with immunity from prosecution. All the incoming remittances under the scheme can be taxed reasonably (say 15%). Besides, the Government can also put certain conditions to route these remittances for the development of Indian infrastructure sector e.g. education, health, transport, energy, communication, road development etc. The scheme should be kept open for at least three years so that, effective results can be achieved. It takes time to understand the scheme and generate the required confidence in the law. The adoption of this scheme can bring unprecedented success in bringing Indian precious foreign exchange back to country.    

Salient Features of the scheme "Infrastructure funding through foreingn remittances"

1. All individuals and companies will be permitted to receive foreign remittances through recognized banking channels without declaring the source of funds. Cash deposits can also be accepted.
2. The remittance receiver will only be required to provide a declaration that, receipts do not relate to drug, terrorism and arms dealings.
3. All remittances under this scheme will be termed “Foreign Receipts” herein after referred as “FRs”.

4. The scheme should remain open for thirty six months after notification.

5. All FRs should be deposited first in a bank account opened for this specific purpose only ( like FCRA Scheme). Only one bank should be entrusted to provide banking facilities under this scheme. This will help the Government in monitoring the inflow and collecting taxes etc. State Bank of India is ideally suited for this purpose as they have country wide network.

6. All FRs should be invested with in nine months in the Central Government approved infrastructure projects. i.e. projects in the field of education, health services, transport, communication, energy etc. All infrastructure projects should be located in a town / village having population of less than 10 lakhs. Highway projects may be exempted from this requirement.

7. Receipts can also be invested in infrastructure development through the subscription of Infrastructure Bonds issue by Government. The bonds to be issued should have a lock in period of 5 years. The bonds may carry interest of 3.5% p.a. payable half yearly.

8. All FRs under this scheme should be taxed at the flat rate of 12.5%. This tax should be collected by the receiving bank same as TDS.

9. Recipients of FRs should be provided total immunity from prosecution and penalties for the amount received by them under this scheme.

10. All FRs under this scheme should be received in convertible / acceptable foreign currency.

Effects of this Scheme on Indian Economy
1. Under this simple scheme, we can expect an inflow of massive amount of foreign remittances.

2. Since, the inflow of foreign exchange will be on non repatriation basis, Government can use it to repay its expensive foreign loans and make the country debt free for the first time since independence. We will save crores of rupees which are presently paid as interest on foreign loans.

3. Indian currency will instantly get stronger and may even beat the lead currencies of developed nations.

4. Foreign exchange reserves will increase substantially.

5. RBI can become a net lender instead of habitual borrower.

6. All kinds of unemployment will vanish as physical development will take place in small towns and villages across the country.

7. Consumption of steel, cement, labour and other inputs in developmental projects will multiply national income. Both direct and indirect revenue will increase many many folds.

8. The scheme will completely transform the country with in thirty six months unless blocked by vested interests in and outside the country.

9. Average literacy rate in the country may go as high as 95% to 98% due to additional educational institution promoted under this scheme.

10. Health services will become much more economical and accessible by common person. 

Precautions and Measures Required for the Success of the Scheme

1. The scheme will need wide publicity around the world. 

2. Indian embassies should be involved to project the scheme.

3. Help centers and guidance centers should be set up to explain the scheme. 

4. Immunity from prosecution to all recipients and their associates should be given in unambiguous terms. 

5. Question regarding sources of funds should not be requested. This will defeat the basic objective of the scheme. 

6. The use of terms like black money etc. should be avoided as that will be counter productive. The amount parked outside India for various reasons can be referred as “Foreign Investments”. This will generate tremendous goodwill. 

7. The scheme should be managed / administered by independent committee reporting directly to Planning Commission. All ministerial interferences should be curtailed. 

8. Infrastructure projects should be identified by planning commission, keeping in mind five year plans. These projects should be auctioned in open house on regular intervals to the individuals and companies participating in this scheme. 

9. All surplus funds should be invested through Reserve Bank of India on commercial terms so as earn at least 8% to 10% returns p.a. 

10. Religious donations should be kept out of this scheme. Scheme should not encourage flow of religion base funds. 

11. Government should have the law to reward handsomely and quickly the informers about storage of illegal money. 

12. The foreign account holders who fail to close their unauthorised accounts with in thirty six months (during the period of scheme) should be severely penalized and punished. Scheme can provide for minimum imprisonment of ten years for holding unauthorized accounts along with fine equal to amount deposited. No exceptions and no exemptions from the penalties should be provided. Informers of unauthorized accounts should be generously rewarded by cash incentives. 


This scheme, if implemented with supporting awareness programme may change the face of the country in short span of three years. Issues relating to corruption etc. can be resolved discreetly. Government Treasury will start over flowing. Indian Economy can achieve 0% unemployment and net lender certificate from the World Bank and IMF. What else we can expect in a short span of time ……………………As a author of this scheme, I can say with confidence that, this will bring both economic and social revolution in the country.

Tapuriah Jain & Associates
Chartered Accountants
21,. Skipper House, 9, Pusa Road, New Delhi - 110 005
Tele : 91-11-28754012 & 13, Mobile : 91-98-100-46108, E-Mail :


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