Black Economy: Its Magnitude, Effects, Government Measures and Schemes | Original Article

ABSTRACT:

Parallel Economy means an illegal economic operation or otherwise known as black money. It represents a segment which is not legitimate. It practices those activities which are contrary to the principles of economic policy pursued in an economy. It is well-known that there is a large quantity of money, income and wealth which has been and is being made owned which is unaccounted in our tax system and therefore, has not suffered tax. This form of money is known as black money. Black money is not only the problem of Indian economy, but it also transcends the borders and has become a global dilemma. Recently, various studies have taken place under the Government of India to tackle the problem of black money in India. Those studies have revealed some astonishing facts about the black money market in India. In the last decade alone, India has lost approximately $125 billion in illegal money. A study has revealed that the black money even exceeds 10% of our Gross Domestic Product. When it comes to flow of black money worldwide, India is ranked in eighth. The flow of black money can seriously affect the entire economic system of India. Black Money causes the prices of commodities to increase to a level beyond normal. People with black money are able to give bribes to the administrators and politicians for getting whatever they want. To control the generation of black money there should be a strong and appropriate legislative framework.