India's new government headed by the Bharatiya Janata Party leader Narendra Modi has set up a special investigation team to unearth "black money", Communication Minister Ravi Shankar Prasad said on Tuesday.

"It is a matter of great assurance for us that in the very first cabinet meeting of the new government head by honourable Prime Minister Shri Narendra Modi, in the light of the directions of the honourable Supreme court, we have constituted SIT [Special Investigation Team] for unearthing black money," said Prasad.

The minister also said the team would be headed by a retired judge of India's Supreme Court, MB Shah, who said on Wednesday that he will be firm in dealing with politicians and industrialists if they were found involved in hiding unaccounted money in foreign banks.

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"I don't care whether it's an industrialist or a politician. They would not say anything to me. I have been a justice for 20 years. No one has ever said anything to me.

"Black money" refers to funds earned through illegal means, whereby income and other taxes have not been paid.

According to a report published by a US-based research and advocacy organisation, India lost $123bn in black money from 2001 to 2010.

India is the eight largest victim of black money loses, said the report 'Illicit Financial Flows from Developing Countries: 2001-2010,' released by Global Financial Integrity. India is the only South Asian country to figure in the top 20 list of such nations.

Source: Agencies