Indian Economy-Black Money ???

I always wondered what this concept of black and white money is! Being from Science background I had zero knowledge about all this economy stuff. I use to wonder that why this Baba Ramdev, Anna, Arvind

Kejriwal are so Behind in bringing it back to India. Recent Government also formed a Special Investigation Team to look in it. So it further escalated my desire to know about it.  

Black Money...Unaccounted cash generated by dealings in a black economy, black market, or organized crime. All these terms 'dirty money', 'black wealth', 'underground wealth', 'black economy', 'parallel economy', 'shadow economy', and 'underground' or 'unofficial' economy usually refer to any income on which the taxes imposed by government or public authorities have not been paid.

Possible sources of black money include drug trafficking, weapons trading, terrorism, and prostitution, selling counterfeit or stolen goods and selling pirated versions of copyrighted items such as software and musical recordings.

Such wealth may also consist of income generated from legitimate activities in a company.. If the company does not pay tax on the profits then it becomes Black money!

Indian economy is said to be one of the Hub of black money. Black money in India is around 40% of the Indian GDP!!! that means 40% of the profit of country is dirty money. Black money has been one of the major cause of inflation in India. Since this money is out of circulation so RBI is unable to control this money. So when RBI thinks that inflation has risen and reduces money supply in the market to correct it, the black money holders release their money thus leading to failure of estimations by RBI.

This was one of the reason why India was less affected by the US financial crises in 2007 when the whole world was fighting from slowdown and depressions.

As per government sources the estimated source of Black money is Rs 15 Lakh Crores. But many other agencies and organizations say that it is highly under estimated.

 So what is your stand?  To  carry the big bags of cash (black) and a heavy heart? Or a draft in your pocket (white)  and the head held high? ….

Bhawna Mulani