Articles by Dev Kar

This paper provides an in-depth analysis of the drivers and dynamics of black money transfers (illicit financial flows) from India since the first full year after independence until 2008. It is estimated that a total of $213.2 billion was shifted out of India between 1948 and 2008, or about 17.7% of India's GDP at end-2008. Applying rates of return on these assets based on the short-term US Treasury bill rate, the total gross transfers of illicit assets by Indian residents amount to $462 billion at the end of 2008. Over this period, illicit flows grew at a compound nominal rate of 11.5% per annum while in real terms they grew by 6.4% per annum. An important finding is that illicit flows from India are more likely to have been driven by a complex interplay of structural factors and governance issues than they are by poor macroeconomic policies. There are reasons to believe that the cumulative loss of capital is significantly understated because economic models can neither capture all sources for the generation of illicit funds nor the various means for their transfer.