ENIGMA OF BLACK MONEY IN INDIA

  ENIGMA OF BLACK MONEY IN INDIA


Introduction:

In the labyrinth of India's economic landscape, there exists a shadowy realm that eludes the scrutinizing eyes of taxation authorities and regulatory bodies - the realm of black money. Black money, often described as the undisclosed income that escapes the tax net, has entrenched itself deeply within the Indian economy, casting a veil of opacity over financial transactions and hindering the country's progress. In this blog, we delve into the intricacies of black money in India, exploring its origins, impacts and measures taken to combat this pervasive issue.


Origins of Black Money:

The genesis of black money in India can be traced back to various sources, including tax evasion, corruption, and illicit activities such as smuggling and money laundering. Tax evasion, facilitated by underreporting of income, inflated expenses and fraudulent accounting practices, remains a primary contributor to the burgeoning black economy. Moreover, the nexus between corrupt officials, businesses and individuals perpetuates the generation and circulation of illicit wealth, further exacerbating the problem.


Impacts on the Economy:

The ramifications of black money extend far beyond mere loss of tax revenue. Its pervasive presence distorts market dynamics, fosters inequality and undermines the integrity of institutions. By evading taxes, individuals and entities gain an unfair competitive advantage, leading to market distortions and hindering the growth of honest businesses. Moreover, the parallel economy fuelled by black money perpetuates economic disparity, as ill-gotten gains exacerbate the gap between the rich and the poor. Furthermore, the erosion of trust in institutions due to widespread corruption corrodes the very foundation of democracy and hampers socio-economic development.


Measures to Combat Black Money:

Over the years, successive governments in India have endeavoured to tackle the menace of black money through a multifaceted approach encompassing legislative reforms, enforcement actions, and international cooperation. Initiatives such as demonetization, aimed at curbing the circulation of illicit cash, and the implementation of stringent anti-money laundering laws signify the government's commitment to combatting this pervasive issue. Additionally, measures to promote digital transactions, enhance transparency in financial dealings, and strengthen tax administration mechanisms are imperative in addressing the root causes of black money generation.


Conclusion:

The eradication of black money is not merely a fiscal imperative but a moral imperative for India's socio-economic progress. As the country strives towards inclusive growth and equitable development, addressing the scourge of black money assumes paramount importance. Through concerted efforts involving policy interventions, enforcement actions, and public awareness campaigns, India can dismantle the edifice of opacity shrouding its economy and pave the way for a more transparent and accountable financial ecosystem. Only by unmasking the veil of secrecy surrounding black money can India realize its full potential as a thriving, vibrant democracy in the global arena.


IILM University 

@rikshita.hota.bt26@iilm.edu 

www.iilm.edu 

www.iilm.ac.in 


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