Black Money

Topics: Bank, Underground economy, Underground culture Pages: 1 (332 words) Published: February 23, 2011
Black money or unaccounted money circulating in the parallel economy is a big menace to the economy. Black money may be defined as the money that is generated by activities that are kept secret in the sense that these are not reported to the authorities. As such this money is also not accounted to the fiscal authorities i.e., taxes are not paid on this money. Contrasted to this is the white money that is shown in relevant accounts and tax paid, if due. Parallel economy connotes the functioning of an unsanctioned sector in the economy whose objectives run parallel, rather in contradiction with the aroused social objectives. This is variously termed as ‘black economy’, ‘unaccounted economy’, ‘illegal economy’, ’subterranean economy’, or ‘unsanctioned economy’. According to the swiss banking association report 2006,deposits is in the banks located in the tertiary of Switzerland by Indian nationals is approx. 1456 billion dollars and it tops the list of 5 countries holding account is swiss bank. Most of the accounts are of our politicians and beaurocrats. Impact of Black Money The circulation of black money has adversely affected the Indian economy in several ways. It would be of interest to study the impact of black money on the Indian economic and social system. i) It leads to the misdirection of precious national resources. A part of black money is kept in a form that contributes nil/Little to productive activities. (ii) It has enormously worsened the income-distribution, and has thereby undermined the fabric of the fixed income salary class finds itself ever be the lower rung of the income-ladder. They pay taxes. Quite a number among them, though not l the corrupt activities of getting bribes / commissions, etc. But in general they are not able to catch up with the people in business, or in professions, or many of those employed. Many in these categories make black activities. Many high placed official and honest employees earn much less than an...
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