Tax Havens

India and Switzerland are negotiating a treaty whereby India can gain some access to details of the money deposited by its citizens in Swiss accounts. The question is, does the government have similar treaties in place or at least lined up with other countries also? Cayman Islands, Luxembourg and Lichtenstein are three countries I, a layman, can think of off the top of my head which can be alternatives to Switzerland. Those who stash the money away must surely be more aware than I am.So unless there are treaties with all these nations I cannot understand how the Swiss treaty can be affective. 

Furthermore the treaty has to be approved by Parliament and when this will happen is a big question mark. Opposition parties have not been letting the Parliament function properly and surely there must be many politicians among those who have money abroad illegally. So the more the treaty's ratification is delayed the more time these people will have to look for alternative locations.

Another point of interest is the tax situation in our country. I do not have the exact figures but apparently about 1% or so of our population pays income tax. Somehow this seems unfair especially when we hear about various irregularities in spending the taxpayers' money. Agricultural income is not taxed at all. This can be brought into the tax ambit. Rates can be lowered and simultaneously penalties for evasion should be made very high to deter. In US courts defendants are occasionally slapped with very high damages. I believe the idea is to deter them from repeating the mistake/offence (the success of this is another question altogether). This is the concept I am talking about. The evasion penalties must be so high that people should think twice before planning tax evasion. However as I have said, the rates should also be brought down simultaneously, thus encouraging more people to honestly pay their taxes.