PTI

PARIS ON the eve of G-20 Finance Ministers’ meeting, India on Friday asked member countries to shed reluctance and start sharing banking information to combat the menace of black money, which is posing a serious challenge to the world economy.

“For (fighting) black money and terror funding, information is the most important and essential ingredient.

Information should be provided fast and on demand and there should be no restrictions,” Finance Minister Pranab Mukherjee told reporters in Paris.

Regretting that some countries try to restrict flow of information by putting unnecessary clauses in tax treaties, he said after the Pittsburgh declaration many of the countries have extended cooperation in sharing information related to banking, but “it should be made faster and it should not only be restricted to prospective effect”.

During the past two years, more than 700 agreements have been signed as instruments on exchange of information between different countries. Later in his meeting with his French counterpart Francois Baroin, Mukherjee said “for these instruments to be really effective, it is essential that a consensus at global level is developed, that the standards are applied to past information, including banking information, so that tax evasion in the past cases can be properly investigated.” Mukherjee is on a three-day official visit to France to attend G20 finance ministers and central bank governors’ meetings.

Mukherjee said that India would be raising this issue and sought France’s support on the issue. He urged France to press on tax havens to share past banking information that would help trace and curb black money.

“I request France to support India’s stand that the international standards for transparency and exchange of information are applied to past information, including banking information, and that it finds mention in the G20 communique,” Mukherjee told his French counterpart Baroin.

He said India was “seriously considering signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters” as this will help get greater access to tax related information.

“Members of the G20 can take a lead in this regard by starting exchanging information automatically with their treaty partners on a voluntary basis and then urging other countries also to do so,” he said.

Some tax havens like Switzerland have agreed to share banking information with India effective from April 1, 2011. However, India has been pushing to get past banking information also to trace tax evaders and black money.

He also pressed for transparency in futures and over the counter markets stating that the volatility in commodity prices is causing inflation in emerging economies.

“India is major commodity importer, and hence India supports the need to improve information and transparency in futures and OTC markets,” Mukherjee said.