A study about the effects of black money in our national economy has revealed many interesting facts and this time I am going to show them to you. It is believed by some experts in economics that recession and such phenomena are possible only in white money. In black or unaccounted money they are not evident. This is possible because all the so called controls those various governmental bodies such as Reserve Bank introduce and due to which recession is caused are not affecting this black money. Black money economy is always parallel to white money economy but unaffected by the rules those control white money. We may say that laws of natural economy control black money movement while laws of ...view middle of the document...
This bribe is the first step of the black money. Before payment of the bribe that money was white and as it is paid it becomes black! This black money is usually shared by other staff in the department and it is believed that in some cases the share of the bribe goes up to the chief minister! Or even to the central ministers! Can’t believe? Believe it.
Originally people were giving bakshis on doing good work to the concerned staff but later on it was converted in a bribe and demanded before work in done. Bakshis was given voluntarily while bribe is per force.
We have seen the first step of black money creation, now this black money is spent by the recipients to purchase many necessities of those people. It can be anything, daily grocery or a car or enjoyment in a night club, expensive hotels, liquor, gambling, prostitution almost any thing is done with this money. This creates second phase of black money. At this phase it is believed that the money grows as it attracts some white money in it. When this money is spent to buy some innocent purchases they are paid by some receipt. Every time payment is made through a sales tax paid receipt that black money becomes white. In this way, usually some black money gets back into the white money. Observers believe that this conversion is comparatively of very little consequence. May be something like 15 to 20 % black money does go back into white but measure part remains in the black phase and there it keeps growing.
We shall see the third and the most important phase of the movement of black money. Strategically placed people Government employees make black money, amass black money in large amount and now the question before them is how to keep it. Keeping money in the banks in savings account has definite limitations and when it exceeds that limit, the problem becomes heavy on them. At that time some people who have paid them the black money to get their things done come to their rescue. They offer to keep that money and some times they even offer some meager interest also. The black money owner is not interested in that interest and is more interested in safe keeping of the amount; gives the money to these businessmen. Now this black money is in the market to grow more because every deal made with it is again black and the profits out of that business is also black! Now it becomes easy for the bribers to pay the bribe since now they are paying the bribe out of the black money itself. They find no difficulty in keeping the books of accounts. In short we understand that black money is the money which is not accounted for in the tax regime.
It is believed that at present almost 65% money moving in the market is black! Government from time to time makes various precautionary measures to curb growth of black money but those are not implemented effectively for obvious reason and that is that the people who are supposed to implement them are themselves involved in making black money....
