economy : What-is-black-money -1
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.
Who initiates it?
- You, me and everyone else around us. Our irresponsibility and insincerity are the reasons for the existence of black money. Let me explain….
- When we go to a nearby store to buy a toothpaste, How many of us demand a bill for it? By not demanding a bill, we are encouraging the storekeeper to create no. 2 accounts and maintain no. 2 records and are adding our part of black money to the economy.
- Every cash transaction you do in your daily life is a cause or encouragement for some black money. 🙂
How does it hamper economic growth?
- Black money is illegal money and hence un accounted for tax. There is no tax paid on the black money.
- Taxes are government's revenues which are spent on major infrastructure projects, upliftment of poor, and redistributing the wealth.
- By avoiding taxes, We are hampering our countries growth and degrading our society values at the sametime. 🙂