Black Money And Its Impact On Our Economy

Black money is the money which is unaccounted and is circulated. This is a big menace to the economy of our country. Black money is one of the hot topics discussed now a days in the country. Black money needs to be eliminated and it will generate more revenue for the Government if it is eliminated. This article is about black money and its impact on our economy.





Black money is nothing but the unaccounted money which is under circulation in the country. Black money is the main cause of big loss in the tax-revenue for our Government.



We can say that black money is generated by the activities that are kept secret. And this money is not accounted for tax purpose because Government does not know about this money. White money is something which can be shown with relevant accounts and taxes that are paid.



Recently Swiss bank has indicated that India has more money than the rest of countries in the world. This is really a shocking news for us. Indian people have deposited huge amount of black money in Swiss bank. The total black money of the people of all other countries is less than the black money deposited by Indians. If black money deposits was an olympic event, India would win a Gold medal. Next comes Russia with more than 4 times lesser than India. USA is not there in the list of top five!.



One good news is that Switzerland Government has agree to reveal the names of account holders if the respective Governments formally asked for it. But Indian Government is asking for the details of account holders even though there is lot of pressure from many people across the country. It is time for every one of us to pressurize the Government to reveal the details of account holders of Swiss bank so that corruption is weeded out in our country.



Indian black money in Swiss banks

As per the information provided by Swiss bank, India is on the top of the list of black money deposits in their banks. The total black money deposited by Indians is more than the total black money deposits of other countries. Here is the list of black money deposits by people of various countries.



India -- $1500 billions



Russia -- $470 billions



United KIngdom -- $390 billions



Ukraine -- $100 billions



China -- $96 billions





These are the top 5 countries with black money deposits in Swiss bank. The deposits of other countries are very minimal. We can see that USA is not there in the list of top 5. It is really very embarrassing to see that our country tops in the list of black money holders. This amount is nearly 13 times of the national foreign depts.



Every year the black money deposits by Indians is increasing at a rapid pace, but Indian Government is silent on this. Indian Government should appropriate steps to bring back the black money deposited in Swiss banks.



The impact of black money on Indian economy

Black money circulation has severely affected Indian economy in many ways. Let us see what is the impact of black money circulation on Indian economy.



Precious national resources are not utilized properly.



Black money does not contribute for any productive activities in the country



There is a huge loss to the income tax revenue for the Government. No tax is paid for the black money. The fixed salaried people are paid income tax and are in lower portion of income-ladder. That is the reason many government officials are involving in corrupt activities like getting bribes and commissions. In general they are not able to catch up with the business men or professionals. Many of the highly paid Government officials and honest employees are earning very much less amount than an average small shop keeper in cities like Mumbai or Delhi. But income tax is paid by these employees where as the shop keeper does not pay the tax even though he earns more than an employee.



It is not possible to make correct analysis of our economic system and formulate right policies due to circulation of black money. For example it is not posisble to exactly calculate saving-income ratio, or income of various sectors etc. So most of these estimates are only a guess work.



Finally black money has corrupted our political system. We can see most of the MLAs, MPs, Ministers collecting funds openly for which there is no accountability.





What is to be done now?

We can bring back the black money deposited in Swiss banks back to our country. So much can be done for the development of the country if we bring back the black money and use it for productive activities.



If the total black money is brought back, India will be able to clear all the foreign debts within 24 hours. By using this black money Indian Government can maintain the country for another 30 years even if all the taxes are abolished.



There is an indication that around 75 thousand people are travelling to Switzerland every year and some 25 thousands travel very frequently.



Now it is the responsibility of our Government to take serious steps and get back the black money deposited in Swiss banks. Since Switzerland has agreed to reveal the names of the account holders now, Indian Government should sincerely work out to find the names of persons who deposited black money in Swiss bank and take necessary steps to bring back the black money. This has become a matter of pride for our country. If the Government still keeps silence on this issue of black money, the whole world will laugh at us.



Swiss Government recently passed an act to return the black money to the country of origin. Let us hope that our Government will take serious steps to deal with the black money and try to get back the money from Swiss banks.