• The term black money is of a recent origin which first came to be used around the year 2000. It is another variation of advance fee fraud and is also called a 'wash wash scam'. The scam came to be known as black money scam was originally handled by swindlers or conmen who fraudulently obtained money from their victims by exploiting their confidence. They convinced their victims that a trunk-full of real money had been dyed black to avoid detection by customs. The trunk actually contained bank-note sized papers dyed black. They would somehow persuade their victim to pay for the chemicals to wash the money with a promise to give him / her share from the proceeds. In this way, the conmen duped their customers telling them that the chemical required to remove the black dye was very costly and fraudulently obtained a good sum of money from the gullible and innocent
Term black money as used in modern times
• In the modern world, the term black money is used for the money which is unaccounted and no statutory taxes are paid to the authorities since it is kept within the country of abroad hidden from the eyes of the authorities. This underground, unrecorded and irregular hoarding of wealth in any form is what is said to be running a shadow economy or a parallel economy in a country. Black money can also be termed as production of goods and services whether done legally or illegally but which is not taken into account for the official estimation of the country's Gross Domestic Product (GDP) because it is neither detected by the authorities nor is declared by its creators. India's stands at the 10th position as far as the richest people in the country are concerned. This list is created by taking into account the amount of white money which is available for investment and does not include personal assets whether movable or immovable. Just consider what will India's position among the richest people in the world if the amount of black money is also take into consideration while compiling this list of the wealthy persons in the world. The paradox is that it is happening in a country where more than 50 per cent of the population is living below the poverty line (BPL).
Causes for the creation of black money
Corrupt practices indulged into by corrupt people at all levels
• There are several causes due to which the black money is created in a country. Black money is created by the corrupt practices indulged in by politicians, bureaucrats and other high and low level civil servants. They take huge or small bribes which are kept hidden as they illegal sources of earning money. The transactions in black money do take place in the market due to which the term parallel economy comes into existence. Only very rarely these transactions are caught and most of the offenders of creation of black money are never known to the government. The second important reason that these transactions remain hidden is that both the offenders and the executors of law collude with each other and become the sharers in black money. People in all walks of life from the rich business tycoons, the high level politicians, the senior bureaucrats, high ranking officers of the government, big contractors to the low level government servants including class IV employees are involved in this phenomenon of black money creation. Recently a racket of fake certificates of OBCs and SCs has been found for admission into Delhi University. It is reported that Rs.3 – Rs.5 lakh were paid to obtain these bribe certificates.
Complex tax structure and corrupt tax officials
• Adding fuel to the fire, is the country's complex tax structure and corrupt tax officials which is the cause of creation of black money. The honest and sincere people who may otherwise be willing to pay taxes shy away from paying them before the complex procedures, forms and returns involved in the payment of taxes. Only a few sincere government employees whose...