Black Markets thrive in India
How much money lies in white in India (and abroad, by Indians) and how much money lies in black?
What is BLACK money? In today’s technology-driven era, monetary or financial transactions happen 24×7. The transactions where a portion of the money should go to the government, but does not happen is a black money. For example: If sales tax is not paid, income tax is not paid or where dues or fees are not paid but go to the intermediary hands (bribery, greasing palm), they constitute black money. Who suffers if black market thrives? The treasury (sarkaari kosh/khazaana) suffers and in the process, and consequently we all suffer because development work (civic amenities like roads, bridges, schools and other govt related works) does not happen as expected.
An article published today in The Hindu says that as per latest estimates, 75 % of Indian economy could be in form of BLACK money.
It is difficult to reliably estimate how much treasure lies in black markets! To get some idea, the UPA government led by Mr. Man Mohan Singh had commissioned the National Institute of Public Finance and Policy (NIPFP) to undertake this task. The report was submitted to the then Finance Minister Mr. P Chidambaram, but as the news reveals, he never brought it out. The file now lies with Mr. Arun Jaitely, the current Finance Minister.
The 3 sectors contributing most to black economy are: Capitation fee for higher education sector, Real estate deals, and Mining industry. For example, last year capitation fee collected in clandestine manner by private colleges was to the tune of approx. 6000 Crores.
If the law of land is strong, if it is easy for people to do businesses in more transparent way, when financial laws are not complex and where government makes it easy for its citizens to do businesses through technology (e-governance), black markets will find it difficult to grow. But if politicians and businesses join hands to foster a mutually rewarding relationship, the interests of the the public are often ignored under such circumstances. This is called crony-capitalism.
Q: Can govt control black markets?
A: Yes, a strong government can. I mean you do not have to be physically strong. The intent to curb corruption is enough to make a headway in this direction.
Q: Do we have a strong govt at the Center?
A: Suna to yahi hai! But, does the current BJP party – even though with clear majority in the Parliament- has a clear financial integrity as its goal and objective? If its house is not in order, how can it bring semblance to the financial order of the country?
To read the details , click to view the article here.