If it looks like a duck, walks like a duck and quacks like a duck, it is probably a duck.
So, if something looks like an export scam, feels like an export scam and is more or less proven to be one, why is it not an export scam?
Ever since three intrepid number-crunchers at Kotak Securities brought out a report in October raising questions about Indias export numbers and foreign investor (FIIs) inflows, there has been a guilty silence all around, and mainstream economists have been in denial.
Among other things, the Kotak analysts Sanjeev Prasad, Sunita Baldawa and Amit Kumar said that export figures in several engineering goods were simply too fantasic to be believed. They raised the suspicion that some of the high-growth areas in exports could simply be the result of overinvoicing an effort to bring back black money parked abroad to India as tax havens lose their charm.
Our study of exports data of major engineering companies (including automobiles and metals) shows that the increase in their exports does not reconcile with the steep increase in official exports data. In fact, the gap is quite substantial, the report said.
As Firstpost reported in October, the official export data showed a 79 percent year-on-year export growth in 2010-11. Exports by engineering companies in the BSE 500 (the biggest companies in India) showed just 11 percent growth. The engineering export jump accounted for $30 billionn (up from $38 billion to $68 billion). The figures for the BSE 500 showed a jump of just Rs 61 billion (rupees, not dollars). Converted at the rate of $ 1= Rs 44, this is just $1.38 billion.
Where did the rest of the $28-and-odd billion come from?
The Kotak trio also raised the possibility that much of this could be overinvoicing of exports. They said: Some reports have alleged that some individuals may have been compelled to bring back funds through the official route by simply overinvoicing exports or even resorting to fraudulent exports thanks to (1) increased international scrutiny of unaccounted funds in bank accounts in Switzerland and other financial centres, and (2) heightened debate in India about action against unaccounted overseas wealth.
Export Scam 2.0: Government has no fig-leaf left to cover itself | Firstpost
So, if something looks like an export scam, feels like an export scam and is more or less proven to be one, why is it not an export scam?
Ever since three intrepid number-crunchers at Kotak Securities brought out a report in October raising questions about Indias export numbers and foreign investor (FIIs) inflows, there has been a guilty silence all around, and mainstream economists have been in denial.
Among other things, the Kotak analysts Sanjeev Prasad, Sunita Baldawa and Amit Kumar said that export figures in several engineering goods were simply too fantasic to be believed. They raised the suspicion that some of the high-growth areas in exports could simply be the result of overinvoicing an effort to bring back black money parked abroad to India as tax havens lose their charm.
Our study of exports data of major engineering companies (including automobiles and metals) shows that the increase in their exports does not reconcile with the steep increase in official exports data. In fact, the gap is quite substantial, the report said.
As Firstpost reported in October, the official export data showed a 79 percent year-on-year export growth in 2010-11. Exports by engineering companies in the BSE 500 (the biggest companies in India) showed just 11 percent growth. The engineering export jump accounted for $30 billionn (up from $38 billion to $68 billion). The figures for the BSE 500 showed a jump of just Rs 61 billion (rupees, not dollars). Converted at the rate of $ 1= Rs 44, this is just $1.38 billion.
Where did the rest of the $28-and-odd billion come from?
The Kotak trio also raised the possibility that much of this could be overinvoicing of exports. They said: Some reports have alleged that some individuals may have been compelled to bring back funds through the official route by simply overinvoicing exports or even resorting to fraudulent exports thanks to (1) increased international scrutiny of unaccounted funds in bank accounts in Switzerland and other financial centres, and (2) heightened debate in India about action against unaccounted overseas wealth.
Export Scam 2.0: Government has no fig-leaf left to cover itself | Firstpost
