Black Money

Five reasons why the Indian Express Swiss account story is incredibly important

By revealing the names of businessmen and politicians, the investigation could help reshape law and policy.

When the Indian Express tweeted on Sunday that it was going to break “the biggest news of the year,” lots of people sat up and took notice. The last time the paper did this, it published an article claiming that the government-army relationship was so bad that the word “coup” wasn’t far away. That story dominated headlines for days and provoked heated debates for much longer. So when the Express finally came out on Monday morning, revealing a list of Indian Swiss bank account holders as part of a global investigation into tax dodgers, it didn’t quite seem to live up to the billing.

Forget the biggest news story of the year, it didn’t even appear to be the biggest story of the day, with TV news channels putting the political crisis in Bihar at the top of their bulletins instead of this. “Old news/nothing new in it/who didn’t know this already?” was the primary reaction followed by comments about there being little political fallout. Even adjusting for the natural journalistic tendency to undercut a competitor's work, reaction was still muted.

It’s true, there might not be anything terribly new in the Express’ story (and the paper might actually have done it a disservice by attempting to hype it up). But it still is incredibly important.

Here’s why:

1) It exposes an elite Jan Dhan Yojana
The “nothing new” response comes not just from people in the know, especially those privy to the Black Money account list that has been floating around Delhi, but also ordinary non-Lutyens’ folk who simply presume that the rich must be hiding their money away somewhere. It’s not news that the rich, privileged and famous put their money into Swiss banks, potentially through illegal means.

But like everything else, this is something that’s always talked about, but never made official. We all might “know” that the rich are doing this, but for it to become official it has to be put on paper: newsprint first, court documents later.

Think of it as a version of the Jan Dhan Yojana. That programme attempts to bring people into the financial system by getting them to open documented accounts. This effort does much the same, except instead of dealing with people who were accidentally out of the financial system, it attempts to repatriate those who were intentionally hiding from it.

2) It names the Ambanis
A quick corollary to that involves the names that have actually made it to the paper. Specifically, Ambani. Both Mukesh and Anil Ambani, among India’s most wealthy industrialists, have been named in the reports along with a large number of other businessmen. Again, this might not seem like something new: Mukesh Ambani’s wealth is so infamous that hilarious parody songs are made about it and there’s nothing hush-hush about it.

Yet the Ambanis have also been among the most difficult to pin down on paper. Just three years ago HSBC apologised to Mukesh Ambani for “embroiling” him in the black money controversy, saying he didn’t have any account in their private banking unit. This may yet be true, since the Indian Express details date back to 2007 and even that might not be illegal, undeclared money. Yet the simple act of naming the Ambanis is a noteworthy move, considering their propensity to sue anyone attempting to question their version of events.

3) The nation must know
But they’re private players, and tax avoidance is a legal maneuver for businesses, right? Nothing wrong with it, it is often said with the addition that it is in fact a way of encouraging more business, which could lead to growth and a better economy.

Here’s the problem with that. First, the rich are not entirely self-made. The Ambanis, like hundreds of other businessmen in India, benefit from incentives as varied as government-acquired land and tax breaks. While those might be legal as it stands, the law is meant to benefit the country and the taxpayer, so the way it is being used remains relevant. If a legal provision aimed at making business more comfortable ends up failing to generate much growth, the taxpayer has a right to know and demand changes in the law if necessary.

Second, this is not a conversation limited to India. Around the world, people are not just questioning tax evasion, which is illegal, but also tax avoidance, because simply insisting that something is lawful doesn’t make it right. This is especially true because large financial companies can innovate and game the system faster than laws can be changed.

As the Guardian points out, in its piece on why it chose to report on the HSBC leaks,
“Not all HSBC’s Swiss private bank customers are public figures and many are not dishonest... The Guardian is not naming such individuals. However, others emerge, according to the files, as would-be – though legal – tax avoiders of one kind or another, who would have deprived the UK and other countries of revenue to provide public services… the public should be entitled to know what has been going on in Switzerland. But the full range of behaviour also deserves to be made clear.

4) It isn't all just about politics
The news is not going to have immediate political fallout. Sure some will bring up the politically connected names on the HSBC list, others will remind the prime minister of a campaign promise to bring back crores of black money. But that might say more about the current affairs discourse in India, which has become addicted to purely political stories, with little care for policy. The Indian Express story might not generate much in the way of an immediate political controversy, but it makes an important point about the country’s taxation policy and the way we treat the wealth, issues that must not be missed simply because it isn’t a stick to beat Modi’s government with.

5) It's a start-to-finish story
The Indian media have a notoriously fickle attention span. For instance, the 2G spectrum scandal might have been the beginning of the end for the previous government, but how many people are aware of what has happened to the alleged culprits in the matter? What is going on with the coal scam? Or the AgustaWestland contracts? Or the death sentences of the Delhi gangrape-murder convicts?

The media has a tendency to focus on the dramatic news-break, but not the mundane follow-up. The Indian Express story, thanks to the work of International Consortium of Investigative Journalists, falls in the category of being a hugely important follow-up instead of a newsbreak. Only consistent reportage and focus on these matters, beyond the newsbreak, will ensure that such interventions actually lead to significant action.

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