All for the asset’s worth

All for the asset’s worth
It is reported that USD 462 Billion money in non-white grounds is stacked outside India. The question or a solution to bring this money back to India is desirable. Let us try to explore the various means for which this can be done.
According to a source, 

“India’s underground economy is closely tied to illicit financial outflows. The total present value of India’s illicit assets held abroad ($462 billion) accounts for approximately 72 percent of India’s underground economy. This means that almost three-quarters of the illicit assets comprising India’s underground economy—which has been estimated to account for 50 percent of India’s GDP (approximately $640 billion at the end of 2008)—ends up outside of the country. 

The finding that only 27.8 percent of India’s illicit assets are held domestically support arguments that the desire to amass wealth illegally without attracting government attention is one of the primary motivations behind the cross-border transfer of illicit capital. 

In the post-reform period of 1991-2008, deregulation and trade liberalization accelerated the outflow of illicit money from the Indian economy. Opportunities for trade mispricing grew and expansion of the global shadow financial system—particularly island tax havens—accommodated the increased outflow of India’s illicit capital flight.”

The first clear thought that comes to my mind is the tax relaxation or creating the tax havens and allowing of the money to enter India with relative ease, by paying a part of it in the form of taxes and allowing the black money to be converted into white money goods. Let us say there stands a magical figure, say 65%, which allows the money to be kept with the rest to be dissipated in the form of tax to the government. But following such a trail would commend a rise of the interest rates for the NRIs, which RBI has done successfully under the Congress Government. Also, allowances should be made to allow the investment in India as FDIs and FIIs.
Hence, the question is of raising interest rates, all over, for the NRIs, including a lock-in period in the bank, say for 3-5 years. This would allow the money to be invested in longer terms by the Indian Banks. Also, the figure churning advantage should be done in a proper format so that the money gets transferred.
Also, in the diplomatic front, India should urge to form a bilateral trade union with the countries where the money is stacked, so that the account is disclosed to the government, instead of the foreign country maintaining a gate-keeper policy.
Also, transition of money from India to the other countries should be stopped. A strict vigil should be kept on this transition. Probably this would help in stopping the outflow of liquid assets.

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