Black Money: A Parallel Economy

Posted in Finance Articles, Total Reads: 5646 , Published on 07 January 2011
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Money- the most important element in the life of every individual. From a top businessman to a worker, from a sports athlete to a politician, from a burglar to a policeman, all people have value for money. Ever since money has been introduced as the medium of trade, the priority and objectives in people’s lives has been bounded by earning money for food, shelter, health, luxury etc. Every organization and every individual contribute towards the economy of a country. A country where the workforce gives taxes gives the country a chance to prosper, develop and grow. But there is a dark brutal force which hurts and hinders the progress and development of a nation- Black Money.

 

Black Money

In simple terms, black money is referred to as the money earned by people or organizations by sale, trade or business and which is unaccounted for. As an administrative and legislative organization, the government charges various taxes to its citizens to control the surplus money with them and use that revenue for providing technology, infrastructure, education, health services etc to the people. But some people avoid paying taxes or use the loopholes in the system and create a parallel economy which is collectively called the black money.

 

One of the most important contributors to black money is piracy. Apart from paying their taxes, business organizations pay millions of dollars for copyright and patent of their products so that other brands and companies do not misuse their branding efforts. But piracy of copyrighted products exists on an extremely large scale. Pirated books, cd-roms, apparels, toys, fake medicines, electronics, duplicate products etc account for billions of dollars which contributes tremendously in the parallel economy. Not only does it directly affect the original companies, but it also erodes the foundation and development of the country by nonpayment of taxes. The estimated piracy market in India alone is over $2 bn which is bound to grow as keeping a vigil on it is next to impossible atleast in the current scenario.

 

To evade taxes corrupt businessmen, politicians and other people, hide their black money, assets, precious gifts etc in foreign banks which are not bound by the laws of their country, thereby depriving their government of the revenue needed for progress. From multi-crore scams to avoiding taxes to selling products even Re.1 above the M.R.P., all of these things eventually add up to destabilize the economy.

 

A source from Swiss bank quotes "Indians are poor but India is not a poor country". Adding to that, "Rs. 280 lac crore" of Indian money is deposited in Swiss banks which can be used for 'tax less' budget for 3 decades. This unaccounted money can give 60 crore jobs; from any village to Delhi 4 lane roads can be built; free power supply can be given to more than 500 social projects. Also, every citizen can get monthly Rs.2000/- for 60 years and there would be no need of World Bank & IMF loans. This is how the unaccounted black money causes problems to the country due to the greed of a few people.

 

Every element in the world has a positive and a negative side.

For every heads, there is a tails; For every Good, there is Evil; For every black, there is white.

Similarly, with the existence of an economy, there exists a parallel economy, where the rodent black money, erodes the prosperity of a nation and makes the foundation hollow.

 


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