PREVENTION OF MONEY LAUNDERING ACT, 2002; A CRITICAL OVERVIEW OF ENFORCEMENT AND PROSECUTION OF ECONOMIC OFFENCES IN INDIA

India’s struggle to combat the increasing trends of economic offences and financial fraud has been very challenging since its entry into global politics. Financial crimes not only strangulate the economy but also abuse the country’s financial sector and present its vulnerabilities to other crimes. Economic abuse and financial crimes have devastating, far-reaching consequences, causing severe financial hardship like debt, homelessness and poverty, deep mental and physical health issues such as anxiety, depression, stress-related illness, increased suicide risk and societal breakdown by eroding trust, weakening institutions, and fostering inequality, ultimately trapping victims and undermining economic stability. Judicial delays, systemic corruption and low conviction rate are challenges that curb India’s struggle to combat economic crimes, cross-border cooperation, and the evolving nature of sophisticated financial crimes that exploit regulatory gaps have impacted the country’s efforts to fight against financial crimes. A major step in combating financial crimes was India’s commitment to enacting the Prevention of Money Laundering Act (PMLA), 2002, prompted by global concerns over drug trafficking and organized crimes. India’s commitment to international anti-money laundering efforts led to the UN Conventions and the formation of the Financial Action Task Force (FATF). The PMLA combat the menace of illicit funds, especially from drug smuggling, by confiscating crime proceeds. The Act came into force in 2005 after parliamentary review and several legislative steps. This has since been the country’s primary legislation, which investigates, prosecutes and punishes financial crimes.