Illegal hoarding and unauthoritative accumulation of money with any particular persons or sectors is called black money. In India, there exists parallel economy based on black money, which is an open challenge to the stability of our real national economy. This precisely means, inflamation. It is soil deep-rooted phenomenon of our society that the same has been accepted as normal fact of life. Although the black money creates imbalance in the economic sphere of the country and also leads to unlawful sufferings of the weaker sections, yet it does not touch our conscience and even we are attached by its shining beauty.
In recent years, the purchasing power of rupee has considerably come down. It is fundamental principle of economics that if the paper currency is not being supported by adequate reservation of gold with the Government, then its value may not take much time to touch bottom level.
Much amount of black money is generated through sale of fixed assets, immovable properties, raw materials and scraps, etc. It is expended on luxury items i.e. cars ,gold, ornaments, precious stones and for extortion of houses and performing of family weddings, etc, which is still continuing to be craze of the people. The black money holders reserve some black money for donating the same for elections purposes to the political parties or persons, treating it to be an investment thinking to use the candidate as a command performer at appropriate time. Generally, the tax returns filed by rich people are fabricated and false. Apart form double accounting, other ticky ways are also adopted. They indulge in ‘benami transactions and try to apportion their black money in the names of their relatives and also faithful servants, who are not income taxpayers. This is one of the prevalent practice to misguide the govt. officials and authorities. Some times, influential business magnets obtain , permits and import or manufacturing licenses in excess to their actual need and then they sell them to others at cash premium at the enhanced value. Either the purchase bills are overinvoiced or the dummy bills are the being prepared. Smuggling activities fully depend on black money and the money thus earned is again invested into unlawful business or smuggling. If any of these devices is rendered illegal or practically ineffective by the government, then other effective means are cleverly discovered by the black-marketeers and the trade dealing in the black money does not stop. They become richer and the poor becomes poorer. It is said that some of the bureucrates and politicians, who are in the key position, are also glove in hand with the dealers of black marketing trade and they add to the evil of unlawful collection of black money.
some of the major means of the government to collect the revenue are by levying income tax , sales tax, customs ,duties, capital gain tax, wealth tax and gift tax etc. But some times the counsels behave more like a link only between the tax-authority and the black marketeer, in which paramount consideration is personal gain ,even it is at the cost of revenue of the Government . In the present days, the tax structure is also faulty on certain points. Sometimes leakage of foreign exchange happens. The smugglers feel that their activities are more beneficial, handy and practical, whereas, the honest persons have to pay full tax, leaving no scope for any incentive.
For solving the problem of black money there must be simplification of tax-structure, some incentives should be given to honest taxpayers and there must wide publication of voluntary disclosure schemes. There should be rationalisation, reduction and indexation in the rates of income-tax, excise and custom duties, etc. Apart from it, there must be strict vigilance on the activities of the government machinery and black marketeers. But , this is can be done only if the corruption is weeded from the top to the bottom.
