NEW DELHI, Nov 11: Indian tax-dodgers are cheating the national government of 85 billion dollars of revenue every year, a report said on Sunday.

The Pioneer newspaper said the staggering sum accounted for almost 20 percent of India’s Gross Domestic Product.

The newspaper based its story on a confidential police document, which was presented to Home Minister Lal Krishna Advani earlier this month.

Central Bureau of Investigation (CBI) officials confirmed to AFP that the document was produced recently.

A senior CBI official told AFP that the calculation of the illegal tax-evaded funds — termed “black money” in India — was based on “several factors and economic parameters”, but refused to give details of the figures involved.

However the newspaper quoted the report as saying: “If 50 percent of this income is tapped then government revenue is likely to go up by 2,000 billion rupees (42.5 billion dollars) in a single year.”

Although the amount of black money was increasing, the number of prosecutions of tax-dodgers in the courts were decreasing, the newspaper said.

“Just two years back, 5,674 searches were made in India and the total value of assets seized was 4.1 billion rupees (88 million dollars). However last year only 2,946 searches were conducted and assets seized valued at 2.5 billion rupees (43 million dollars),” it quoted the document as saying.

The CBI also warned that besides the black money “mind-boggling” sums of counterfeit currency was floating around, destabilising the national economy, the newspaper reported.

“Fake currency forms 0.01 percent of the total currency in circulation,” the document said, adding that police seized Indian counterfeit money worth 6,382 dollars in 1996, but the figure sky-rocketed to more than 75,000 dollars in 1999.

The document partly blamed India’s banking sector for the financial mess and called for better policing of white-collar crime.

“One of the areas of economic offence having far-reaching consequences concern frauds in banks and financial institutions,” the newspaper quoted the document as saying.

“Last year commercial banks reported 2,899 cases of fraud but the surprising trend is the increasing number of frauds in the overseas branches of Indian banks.”—AFP