External Dimension of an Emerging Economy, India

2    Illegal flows in India’s BOP accounts

Their components and impact on the economy

Arun Kumar

Introduction

During colonial rule, India was subject to drain of wealth and lost a considerable amount of its savings. Consequently, it faced a shortage of capital for essential development. Its social and physical infrastructure was woefully inadequate compared to what the colonial power managed to accumulate (Kumar 2013). With independence in 1947, it was expected that this loss of savings would come to an end. Instead, it changed its form. One of the important forms through which the country has been losing savings in the post-independence period is flight of capital: that is, capital going out of the country illegally. Its magnitude has been growing ...