How much black money is in India?

economy : How-much-black-money-is-in-India?

Answer by Jai Parimi:

What is black money?

  • There is no uniform definition of black money in the literature or economic theory.
  • In India, Black money refers to funds earned in the black market, on which income and other taxes have not been paid.
  • In reality, Black money is the money that is unaccounted for. Estimating unaccounted money accurately is not possible.
  • In addition to wealth earned through illegal means, the term black money would also include legal income that is concealed from public authorities to evade
    • payment of taxes (income tax, excise duty, sales tax, etc).
    • payment of other contributions.
    • compliance with the provisions of industrial laws such as the Industrial Dispute Act 1947, Minimum Wages Act 1948, Payment of Bonus Act 1936, Factories Act 1948, and Contract Labour (Regulation and Abolition) Act 1970.
    • compliance with other laws and administrative procedures.

What is total estimate of black money?

  • It is difficult to estimate the amount of black money held by Indians in the world or by the girl-next-door. 😛
  • But, guesstimates based on 'Global Financial Integrity' claim that the amount exceeds 'USD 1.4 trillion' in total.
  • Swiss Bankers Association and the Government of Switzerland thrashed the reports & said that the total amount held in all Swiss banks by citizens of India is about 'US$2 billion'.

Edited Image from google

  • A white paper on black money released by MoF, India has listed out how people evade taxes and estimated the black money for 1975 – 1983 as

Source: Estimate of Black Money


Various means of account manipulation to evade tax:

Image Source: Manipulation of Accounts for tax evasion


Complementary/bonus:

On a side note, black money's major source is corruption and as per Transparency International India stand in 94th position out of 177 countries with a score of 36/100. Should I be happy that India has crossed the much coveted pass mark of 33%? 😉

Edited Image: Transparency International

What is CPI?

The Corruption Perceptions Index ranks countries/territories based on how corrupt a country’s public sector is perceived to be. It is a composite index, drawing on corruption-related data from expert and business surveys carried out by a variety of independent and reputable institutions.

What is BPI?

The Bribe Payers Index ranks the world’s wealthiest and most  economically influential countries according to the likelihood of their firms to bribe  abroad.

What is CCI?

Control of corruption reflects perceptions of the extent to which public power is exercised for private gain. This includes both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.

Control of corruption is one of the six dimensions of the Worldwide Governance Indicators.


World CPI map:

Edited Image: Transparency International

How much black money is in India?

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