One estimate says Rs 1,500 to Rs 5,000 crore may have returned to India in the last few months.

If stock brokers and central agencies tracking the flow of black money are to be believed, crores of rupees have already returned to India, via the stock market, gold smuggling and hawala transactions.

"The black money that has returned in the last one-two years is for two purposes. First, for election activities and second is the fear that if BJPs Narendra Modi comes to power, he might come out with a stringent law to bring the money back. So instead of waiting that to happen, stashed money has started flowing in," said Suniil Pachisia, vice-president, Pratibhuti Viniyog Ltd.

One estimate says Rs 1,500 to Rs 5,000 crore may have returned to India in the last few months.

"Since last two to three months, black money in the range of Rs 1,500-Rs 5,000 crore has arrived in the country, via the stock market. It will be spent in the next two weeks for election activities," said a senior Directorate of Revenue Intelligence official, seeking anonymity.

Two years ago, BJP leader Subramanian Swamy had claimed that "black money is no more in Swiss banks". No one believed him then.

Vijay Jadhav's chart shows how black money could be returning to India. Vijay Jadhav's chart shows how black money could be returning to India.

Since the last six months, Vijay Jadhav (alias Guruji) of Mumbai, who claims to be a forensic auditor, had been working on a project named Operation Black Money Return.

After analysing Reserve Bank of India data, hidden data of commodity exchanges, going through network of bullion traders and speaking to commodity and forex experts and forensic auditors, Jadhav has come to the conclusion that black money has already arrived in the country and the figure is similar to the one floating in public domain - Rs 23 lakh crore.

It's up to readers to believe Jadhavs claims, but who knows? He may have a point.

He is the same person, who, six months ago, analysed the hidden software and data of commodity exchanges owned by FTIL and said its promoter Jignesh Shah would need a forensic auditing soon.

According to Jadhav, between 2000 and 2003, when the Central government started a campaign to bring back black money from hidden Swiss bank accounts, individuals and entities who were the owner of those secret accounts planned an exit strategy.

According to the plan, one way was to convert hard cash into a commodity. So individuals purchased 7,000-8,000 tonnes of gold with that money.

Those days, international price of gold was hardly $300 per tonne.

Even if foreign banks tried to sell it in the open market, it would have not received more than $200 per tonne. So banks made it clear it could not return the black money to depositors giving lack of demand as the reason.

On October 3, 2003, a minister inaugurated the MCX Exchange for future trading in gold and silver.

That day, the minister made an interesting public statement.

He said: "India consumes 800 tonnes of gold and 3,500 tonnes of silver per annum and Indian billion traders and speculators hedge and speculate in gold futures to the extent of around Rs 1,000 crore per day."

The figure was incorrect. Those years, internationally, annual consumption of gold was around 700-800 tonnes.

But in India, according to a RBI report, World Gold Council had been quoted as saying that "in 2002, the total demand for gold in India was 467 tonnes and in 2003, 367 tonnes."

So from where did this 800 tonnes figure come?

"The common man of this country was wrongly informed, indicating that gold demand has increased in the country. The main reason behind was to bring non-productive gold back to India, which was lying abroad," said Jadhav.

The commodity exchanges played a crucial role in promoting and selling gold to Indian investors and in a way, helped foreign banks to dump tonnes of gold in India, which was another form of black money.

Another route was the stock market.

"Those individuals who were associated with the corporate world and those who had their own industries used participatory notes (p-notes) and foreign institutional investors (FIIs) to invest in the India market. The flow of forex money started growing, corporations started setting up new projects, lands and properties were purchased and so on," Jadhav said.

Money was flowing into the Indian market, properties prices were going up and investment in gold shot up.

"The demand fro gold went up, because of which foreign banks found it easy to sell gold. As gold continued to be dumped, the foreign exchange that had come into India started flowing back," Jadhav said.

Even today, black money, in the form of gold smuggling, is coming into India.

According to statistics released by Directorate of Revenue Intelligence, the worth of gold seized in India has multiplied by 14 times between 2011 and 2014 financial years.

The value of seized gold in 2014 has risen to Rs 250 crore compared to Rs 17.22 crore in 2011.

Hawala also played a major role in bringing back black money. The network of white collar criminals started collecting black money in China, Singapore, Middle East and other countries and later started sending to India via under-invoice, etc.



"Normally, hawala rates were higher by 1.5-2 per cent that RBI reference rates. But from 2009 and 2013, the hawala rates were even lower than one per cent and sometimes were lower than the RBI reference rate. This indicates the level of demand to bring in money into India," said Jadhav.

He said if 2000-2014 data available with of RBI, M3, GDP and foreign exchange reserve is analysed, it will emerge that black money has arrived in the country in big numbers.

Money supply M3 is the aggregate amount of monetary assets available in a country at a specific time, and is reported by the RBI.

For example, if M3 in percentage of GDP is observed, then:

- On March 31, 2000, M3 in percentage of GDP at market price was 51.06.

- On March 31, 2012, M3 in percentage of GDP at market price was 73.29.

"The way M3 percentage is going up, it should have been between 75-80 by February 21, 2014. If we assume that on February 21, M3 as percentage of GDP was 55-60, then our M3 that day was Rs 93,58,580 crore and not Rs 70,18,935 crore. That means the difference in M3 is Rs 23,39,645 crore," said Jadhav.

According to him, this data reflects that around Rs 23 lakh crore of money supply has entered into the system.

"The amount of black money in foreign banks was estimated to be Rs 25 lakh crore and this is data is about Rs 23 lakh crore," he said.

Jadhav claims to be an experienced financial expert and auditor but whether his calculations are correct, this correspondent has no idea.

He might be entirely wrong with baseless facts and figures with many loose ends and who knows he might be correct by 1 per cent.

The Enforcement Directorate (ED) is not ready to believe Jadhav's charts and theories.

"Its full of loopholes and hard to believe, but one thing is sure: black money is definitely coming back to India, and this time, through the route of gold smuggling," said a senior ED official said.

To sum up, it needs to be checked by forensic experts and central agencies whether black money is still lying in those secret bank lockers or it is on its way to India.

The Finance Minister P Chidambaram has issuing threatening letter to Swiss counterpart of taking legal action for not sharing information on 562 Indians who have stashed away money in HSBC Bank, Geneva. Obviously, the FM is under pressure from opposition parties and now the Supreme Court.

Some days back, even BJP's prime ministerial candidate Narendra Modi resolved to bring black money in foreign banks back and gift it to the country's taxpayers. He knows how to win hearts and votes of billions of common man in India.

Lets have a situation, that, Switzerland and few other tax havens countries gives the required details of all those individuals and corporate entities who have black money abroad to Indian government, do you really think, stashed black money which were lying in those bank lockers since last many years, would still remain there.

