News:A High Level Advisory Group on Trade Policy(HLAG) headed by Surjit Bhalla has suggested that the Centre could bring up to $500 billion of black money if it issues elephant bond.
About Elephant Bonds:
- The elephant bonds are a way for people to bring their offshore undisclosed wealth into India without fear of prosecution.
- Under this mechanism,the people disclosing their black money will receive immunity from all laws including under foreign exchange, black money laws and taxation laws.
- Once they declare their offshore money,they will be asked to invest 40 % of that amount in these elephant bonds.A fixed coupon security will be issued.
- Further,45% of the wealth brought in by subscribing to these elephant bonds will be credited with the depositor but the remaining 15 % will be collected as tax deducted at source by the government.
- The fund gathered by the issuance of these bonds will be utilized to finance infrastructure projects only.
- A bond is a debt instrument in which an investor loans money to an entity (typically corporate or government) which borrows the funds for a defined period of time at a variable or fixed interest rate.
- Bonds are used by companies, municipalities, states and sovereign governments to raise money to finance a variety of projects and activities.