Black money refers to the proceeds or funds received in the black market or otherwise known as the underground economy. Money earned from illegal economic activities like drug trafficking, weapons trading, selling stolen goods or even pirated versions of copyright items like software. The money received from such dealings is thus not taxed as such because they take place outside the jurisdiction of the government.
The recipients of black money need to hide it or spend it only in the underground economy otherwise they would be caught red handed by the government officials as black money is illegal and not accepted in the economy.
Black market or the underground economy is basically a market of illegal economic activities that take place outside the government’s sanctioned channels. The players of these markets make illegal trading and transactions as a way to avoid government taxes, in other words “under the table” transactions. Holders of black money try convert them into “white” or “clean” money by the means of ‘money laundering’.
Money laundering means the process of creating the appearance that large amount of money generated from illegal activities have originated from legal or legitimate sources. Money laundering has a major role in the ever increasing amounts of black money from especially Asian countries and increasing the deposits of the Swiss Banks.
According to recent surveys and trusted sources, India is the highest generator of black money today. If the Swiss Bankers are to be believed, Indians are their highest depositors. India’s tally of black money in foreign accounts is nearly a whopping $ 1,465 Billion and the second being Russia with close to just one-fourth of the amount, at $ 470 Billion. Nearly 609 Indians posses illegal properties worth more than Rs. 100 crore. If the amount is true, it is nearly 13 times India’s foreign debt. If this money is to be distributed amongst Indians who lay below the poverty line, more than 45 crore such poor can get Rs. 1,00,000 each and may solve India’s poverty issue to a large extent.
With Indian having such huge amounts of black money deposited in their bank accounts, the government is trying to get back all these money because most of us are completely aware that along with the highest deposit of black money, India is also one of the poorest countries of the world and that this fact is hampering India’s economic growth.
Thus, if the Indian government somehow manages to get back all the black money stored in the accounts of Indians in the foreign banks, India might well be on the paths of full-scale development and on the verge of being a developed country. But, as this process is itself so complicated and requires the consent of more than just two countries, to make the matters worse, it’s the government officials themselves who have been found guilty of having illegal properties and “Swiss” bank accounts.
Actual root of black money
The actual root of black money especially in India is not drug trafficking or illegal weapons trading, but its corruption. If some political leader or any high ranked government official misuses his/her powers for personal interest or accepts gifts or money as bribe, then it is called ‘corruption’. No matter how much the government tries, until and unless its own officials and employees are clean, it cannot even think of bringing back the black money from foreign banks after all.
Corruption and black money
Corruption and Black Money are the two different sides of the same coin. In the recent scams on black money, it was revealed that several MPs, MLAs and other government servants have accounts in foreign banks and that many have illegal properties both in India and abroad with fake, non-existing or bogus names and identities.
This way, the black money is being converted into white money and circulated around the world including India without helping any good cause. The issue of black money is soon becoming a national concern, at least in India, and it is time that the governments of countries all around the world who are affected should take a strong and bold decision to fight this problem together.
There are Indian politicians who are winning elections on the basis of promising to bring back the black money to India, parliament sessions being dedicated specially to combat this issue but, till now, no visible step is taken to solve the problem. It is nearly the time that the Indian government especially, starts doing something about the issue of black money.