How not to keep secrets: India's real estate, trusts and partnerships tell the story
Synopsis Tax Justice Network's Financial Secrecy Index ranks India 24th globally, highlighting both progress and persistent opacity. While India shows transparency in corporate ownership, weaknesses remain in areas like beneficial ownership and international cooperation. The index underscores the need for global fairness and transparency, urging countries to prioritize it for economic stability and trust. Tax Justice Network's latest Financial Secrecy Index (FSI), released on June 3, ranks India 24th globally, an eight-place jump from its last position. The country's overall secrecy score remains at 56 out of 100.
ADVERTISEMENT The index ranks countries by how much they enable individuals to hide their finances from the law. A secrecy score reflects how permissive a country's laws are, while the 'Global Scale Weight' measures the financial services it offers to non- residents. Together, they form 'FSI Value' - a measure of a country's role in global financial secrecy.
Key highlights of India's secrecy indicators (scores in brackets):
Banking secrecy (34) indicates moderate transparency in banking practices.
Beneficial ownership of trusts (100) suggests a lack of transparency, allowing trusts to potentially conceal the identities of true owners.
Beneficial ownership of foundations and companies (0) reflects strong transparency measures requiring disclosure of beneficial owners.
Free ports ownership (100) points to opacity in the ownership of assets stored in free ports.
Real estate ownership (100) indicates a high level of secrecy in real estate ownership records.
Transparency of partnerships with limited liability (100) reflects a lack of transparency in the ownership and financial reporting of such partnerships.
Transparency of company ownership and accounts (100) suggests company ownership and financial statements are not transparent.
Public country-by-country reporting (100) implies that MNCs are not required to report financial data on a country-by-country basis publicly.
Legal entity identifier (50) indicates partial implementation of unique identifiers for legal entities to enhance transparency.
Tax compliance focus (65) reflects moderate efforts in targeting tax compliance, especially among high-risk entities.
Foreign investment income (70) suggests that foreign investment income may not be fully taxed or reported, leading to potential tax base erosion.
Public statistics (10) indicate limited availability of public data on financial and economic activities.
Anti-money laundering (16) suggests weaknesses in anti-money laundering frameworks.
Automatic exchange of information (AEOI; 26) reflects limited participation in international agreements for the same.
Exchange of information upon request (0) indicates non-participation or ineffective implementation of info exchange upon request.
International legal cooperation (16) indicates limited engagement in international legal cooperation on financial matters. India has built a strong legal and administrative framework for information exchange, particularly excelling in bilateral Exchange of Information on Request (EOIR) and is an early adopter of AEOI. However, in the 2025 FSI, India scored a low 26/100 on AEOI, reflecting concerns around: Limited coverage of asset types (e.g., crypto, digital platforms).
Delays in updating commitments to newer agreements like the Crypto-Asset Reporting Framework (CARF) and platform reporting rules (DPI MCAA). India scored well on transparency in corporate ownership and public financial reporting. However, this progress is undercut by opacity in other high-risk areas. India's limited participation in automatic information exchange and low compliance with international anti- money laundering and legal cooperation standards further highlight systemic weaknesses.
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The index underscores that financial secrecy is no longer a fringe issue. It is now driven by some of the world's largest and most influential economies. This should concern anyone who values global fairness.Financial secrecy corrodes institutions, and it weakens the social contract. It makes citizens question why they should pay taxes when billionaires and MNCs do not. When governments can't collect taxes, they cannot fund essential services. When services fail, trust erodes.
ADVERTISEMENT The index highlights a troubling trend: despite their pro-transparency stance, over half of EU countries are reportedly exploiting a loophole to block tax cooperation with many non-EU, often lower-income, nations. This loophole stems from OECD's tax convention, which allows countries to deny assistance or automatic data exchange with jurisdictions deemed 'non-reciprocal' or 'technically unprepared'.In practice, this means developing countries' tax authorities - those most in need of cooperation to combat illicit financial flows - are denied critical assistance. Meanwhile, wealth siphoned from their economies finds quiet refuge in EU financial institutions. This disparity undermines global efforts to tackle tax evasion, deepens global financial inequality and stifles economic development.
ADVERTISEMENT This year's index offers not just a diagnosis but also hope. Countries like Spain, Denmark and Britain have shown that it is possible to improve transparency while remaining competitive in international finance. Their secrecy scores went down, their share of clean financial services went up - and their rankings fell (a positive outcome in this index). In other words, transparency isn't economic suicide. It's good governance.If the EU wants to be taken seriously, it must close its backdoor and begin treating transparency as a democratic obligation, not a geopolitical privilege. Taxation is not merely about revenue - it is about fairness.
ADVERTISEMENT In a world where wealth moves globally but justice remains local, failing to act now could lead to a far steeper cost - not in euros or dollars, but in trust, stability and democratic legitimacy.
The writer is former principal DG, income-tax (administration), New Delhi
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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Economic Times
4 days ago
- Economic Times
How not to keep secrets: India's real estate, trusts and partnerships tell the story
Synopsis Tax Justice Network's Financial Secrecy Index ranks India 24th globally, highlighting both progress and persistent opacity. While India shows transparency in corporate ownership, weaknesses remain in areas like beneficial ownership and international cooperation. The index underscores the need for global fairness and transparency, urging countries to prioritize it for economic stability and trust. Tax Justice Network's latest Financial Secrecy Index (FSI), released on June 3, ranks India 24th globally, an eight-place jump from its last position. The country's overall secrecy score remains at 56 out of 100. ADVERTISEMENT The index ranks countries by how much they enable individuals to hide their finances from the law. A secrecy score reflects how permissive a country's laws are, while the 'Global Scale Weight' measures the financial services it offers to non- residents. Together, they form 'FSI Value' - a measure of a country's role in global financial secrecy. Key highlights of India's secrecy indicators (scores in brackets): Banking secrecy (34) indicates moderate transparency in banking practices. Beneficial ownership of trusts (100) suggests a lack of transparency, allowing trusts to potentially conceal the identities of true owners. Beneficial ownership of foundations and companies (0) reflects strong transparency measures requiring disclosure of beneficial owners. Free ports ownership (100) points to opacity in the ownership of assets stored in free ports. Real estate ownership (100) indicates a high level of secrecy in real estate ownership records. Transparency of partnerships with limited liability (100) reflects a lack of transparency in the ownership and financial reporting of such partnerships. Transparency of company ownership and accounts (100) suggests company ownership and financial statements are not transparent. Public country-by-country reporting (100) implies that MNCs are not required to report financial data on a country-by-country basis publicly. Legal entity identifier (50) indicates partial implementation of unique identifiers for legal entities to enhance transparency. Tax compliance focus (65) reflects moderate efforts in targeting tax compliance, especially among high-risk entities. Foreign investment income (70) suggests that foreign investment income may not be fully taxed or reported, leading to potential tax base erosion. Public statistics (10) indicate limited availability of public data on financial and economic activities. Anti-money laundering (16) suggests weaknesses in anti-money laundering frameworks. Automatic exchange of information (AEOI; 26) reflects limited participation in international agreements for the same. Exchange of information upon request (0) indicates non-participation or ineffective implementation of info exchange upon request. International legal cooperation (16) indicates limited engagement in international legal cooperation on financial matters. India has built a strong legal and administrative framework for information exchange, particularly excelling in bilateral Exchange of Information on Request (EOIR) and is an early adopter of AEOI. However, in the 2025 FSI, India scored a low 26/100 on AEOI, reflecting concerns around: Limited coverage of asset types (e.g., crypto, digital platforms). Delays in updating commitments to newer agreements like the Crypto-Asset Reporting Framework (CARF) and platform reporting rules (DPI MCAA). India scored well on transparency in corporate ownership and public financial reporting. However, this progress is undercut by opacity in other high-risk areas. India's limited participation in automatic information exchange and low compliance with international anti- money laundering and legal cooperation standards further highlight systemic weaknesses. ADVERTISEMENT The index underscores that financial secrecy is no longer a fringe issue. It is now driven by some of the world's largest and most influential economies. This should concern anyone who values global secrecy corrodes institutions, and it weakens the social contract. It makes citizens question why they should pay taxes when billionaires and MNCs do not. When governments can't collect taxes, they cannot fund essential services. When services fail, trust erodes. ADVERTISEMENT The index highlights a troubling trend: despite their pro-transparency stance, over half of EU countries are reportedly exploiting a loophole to block tax cooperation with many non-EU, often lower-income, nations. This loophole stems from OECD's tax convention, which allows countries to deny assistance or automatic data exchange with jurisdictions deemed 'non-reciprocal' or 'technically unprepared'.In practice, this means developing countries' tax authorities - those most in need of cooperation to combat illicit financial flows - are denied critical assistance. Meanwhile, wealth siphoned from their economies finds quiet refuge in EU financial institutions. This disparity undermines global efforts to tackle tax evasion, deepens global financial inequality and stifles economic development. ADVERTISEMENT This year's index offers not just a diagnosis but also hope. Countries like Spain, Denmark and Britain have shown that it is possible to improve transparency while remaining competitive in international finance. Their secrecy scores went down, their share of clean financial services went up - and their rankings fell (a positive outcome in this index). In other words, transparency isn't economic suicide. It's good the EU wants to be taken seriously, it must close its backdoor and begin treating transparency as a democratic obligation, not a geopolitical privilege. Taxation is not merely about revenue - it is about fairness. ADVERTISEMENT In a world where wealth moves globally but justice remains local, failing to act now could lead to a far steeper cost - not in euros or dollars, but in trust, stability and democratic legitimacy. The writer is former principal DG, income-tax (administration), New Delhi (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of (Catch all the Business News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. NEXT STORY
Time of India
05-06-2025
- Time of India
Vertical gardens to be made must for high-FSI bldgs in Goa: Viswajit Rane
Margao/Bicholim/Vasco: State govt is set to introduce mandatory Lush vertical gardens adorn futuristic skyscrapers at sunset. A reflective pool mirrors the golden cityscape in a tranquil park. vertical gardening requirements for buildings with high floor space index (FSI), town and country planning minister Vishwajit Rane said. The new regulations will require all buildings with 250 or higher FSI to incorporate vertical or terrace gardening systems. Rane said an official notification of the vertical forest guidelines is expected soon. Occupancy certificates will be issued to buildings only upon full compliance with these new requirements, he added. Apart from the vertical gardening mandate, Rane outlined plans to revise FSI restrictions to accommodate essential infrastructure needs. Exemptions from FSI calculations up to a certain extent of the height of a building could be considered specifically to allow for parking facilities and other public amenities like a community hall, he said. The announcement came as Goa launched an ambitious afforestation drive under the 'EkPedMaaKeNaam' campaign, which aims to plant 5 lakh trees across the state over the next three to four months. The first phase began on Thursday with 500 trees planted at Sonsoddo, a place that was once a legacy dump, which will now be home to 65,000 new trees. Rane said that within a year, the place will be transformed into a beautiful landscape. Phase 2 of the tree-planting initiative is scheduled to commence in Aug, with dedicated nodal officers appointed to ensure the smooth execution and continuous monitoring of the programme's progress. Margao MLA Digambar Kamat, director of municipal administration Brijesh Manerkar, and chairperson of Margao Municipal Council Damodar Shirodkar were among those present on the occasion. Meanwhile, Bicholim MLA Chandrakant Shetye, on the occasion of World Environment Day, called on farmers to use modern technology to bring their fallow land under cultivation. 'Our ancestral agricultural land is in ruins today and the younger generation of the households are looking for jobs. Our soil has the potential to grow gold,' he said. In Mormugao, Vasco MLA Krishna Salkar distributed saplings to students from St Joseph Institute, Vasco and surrounding institutions, encouraging them to actively plant and nurture trees.
Time of India
05-06-2025
- Time of India
Special court closes Powai land case against Niranjan Hiranandani, others
MUMBAI : A special court Monday closed criminal proceedings against developer Niranjan Hiranandani and others in the alleged Rs 30,000 crore Powai Area Development Scheme (PADS) land scam case. The judge observed that prosecuting the accused would not be in keeping with justice and that there was no prima facie case after the state Anti-Corruption Bureau submitted a closure report saying there was no evidence of corruption, monetary gratification, dishonest intention, or criminal conspiracy. The case relates to allegations that prime public land leased at concessional rates for affordable housing was diverted to construct luxury real estate and commercial premises by private developers, notably Niranjan Hiranandani, managing director of the Hiranandani group . "Having perused the closure report, I find that no material or anything incriminating, which could connect the accused…with the alleged crime has been found…in my opinion it would thus, be futile to unnecessarily prosecute the accused.., sans any material against them," special judge Shashikant Eknathrao Bangar said in a 119-page order made available on Tuesday. The judge said the closure reports are based on cogent investigation, verified compliance, and supported by judicial orders of the Bombay high court. Pointing to the HC's orders in three related PILs alleging breach of agreement with govt and misuse of FSI and development rights, the judge said allegations concerning breach of affordable housing obligations, amalgamation of flats, and sale of flats were conclusively examined and remedied. The judge noted that the high court had constituted a three-member joint committee to verify compliance and accepted reports in 2016 and 2017, which confirmed that out of 2,200 flats of 80 sqm, 1,337 were constructed, 12 locked, and 887 remained to be completed as per the plan and timeline. "The directions for completion of the remaining flats were passed with monitoring provisions. Any further breach or non-compliance was made subject to the court's ongoing supervision, obviating the need for separate criminal proceedings…the ACB rightly concluded that no prosecutable offence remained. There was no material to show abuse of public office or conspiracy," the judge said, adding that the probe was a 'fair' one. The ACB, through public prosecutor Ramesh Siroya, submitted before the court that sale of larger flats and amalgamation, though deviating from the spirit of the Agreement, was retrospectively regularised through the high court hearing the PILs. The agreement dated 19 Nov 1986, was executed between the state, MMRDA, and the developer for an area of 232 acres. Based on activist Santosh Daundkar's plea alleging that Hiranandani and others were involved in irregularities in the housing project, a court in 2012 ordered a probe. The ACB filed an FIR against Hiranandani and senior urban development department officer Thomas Benjamin and others under the Prevention of Corruption Act and the IPC. In 2013, the ACB sought to close the case on the grounds that there wasn't sufficient evidence. Daundkar opposed the move. The ACB's closure report, which was rejected by the court on Jan 4 2018, led to a directive for further investigations. Following this, a second closure report was submitted on Aug 30, 2019. Daundkar challenged this report too and sought a reinvestigation. He alleged malafide transfer of the investigating officer, who was purportedly preparing to file a chargesheet against top officials and the builder. Daundkar argued that the final report was a result of administrative interference and suppression of crucial material. He contended that the final report is based heavily on the HC's civil PIL orders and ignores criminal aspects. He sought a fresh probe by an independent agency. The ACB said the allegations were not supported by documentary evidence or witness statements. "There are around 8,000 residents (approx) residing in PADS. None of the residents have filed any criminal complaints over the years pertaining to the development carried out in PADS," it submitted. It also pointed out that Daundkar had neither purchased any commercial premises nor was a resident or investor in the development. The judge rejected Daundkar's plea against the closure report, saying it reiterated allegations already considered in PILs and brought no new substantive material.
