Unaccounted money, unlawfully acquired wealth, or other assets acquired by bribery or other morally reprehensible crimes are referred to as “Black Money”. It’s not only cash secreted in secret places or in benami accounts. It can take many different forms, including shares, bonds, securities, and other things. It could take the shape of real estate, such as houses, stores, or a plot of land, or other assets, such as automobiles. It could be gold, silver, diamonds, or jewellery.
India is thought to have a large quantity of black money, estimated to be around 200 million crores. It is also claimed that over 200 crore rupees of black money is made each year in our country. This represents the size of India’s black money market. This also demonstrates the extent of corruption in the country, as well as the unlawful acts that are carried out. Avoiding income and sales taxes is the most common way of making black money.
The majority of businesspeople never disclose their true earnings. They either don’t keep any books of account or keep fraudulent ones to show the authorities. As a result, they never pay the tax that is due to them. However, the money they make from their business continues to grow. After a period of time, when their wealth has grown to enormous proportions, they are unable to demonstrate where this money came from. This is ill-gotten gains. Most of us never ask for a bill from the shopkeeper or dealer when we go shopping. We are never aware of the implications of our actions.
Black Money Deposited in Foreign Lands
Many well-known businessmen, ministers, and celebrities are reported to have placed their funds in overseas banks. Although the actual quantity of money placed by Indians in international banks is unknown, several reports say that the amount put by Indians in their abroad accounts is around the same. According to one of these reports, Switzerland holds a huge US$1.06 trillion, while another states that Indians’ Swizz bank accounts hold roughly US$2 billion. Indians’ unlawful money in foreign tax havens are estimated to be worth around $500 billion, according to reports.
Demonetisation: A Step Towards the Elimination of Black Money
The Modi government has taken a significant step toward eradicating the problem of black money. Narendra Modi stated on November 8, 2016, that 500 and 1000 rupee notes would cease to be legal tender at midnight. On November 9th and 10th, all ATMs around the country were closed. These were refilled with fresh versions of 500 rupee notes and 2000 rupee notes. The old notes were taken out of circulation entirely. This step, according to the government, will reduce the buildup of black money as well as the unlawful enterprises and activities that are sponsored by it.
The abrupt announcement of the withdrawal of old currency notes and a lack of new currency notes caused pandemonium in the country, disrupting routine operations across numerous sectors for several weeks. The public’s response to the ruling was varied. Many people have criticised the decision, claiming that it has simply created public annoyance. It has been chastised for its lack of forethought. In different sections of the country, the public came out to protest the administration. On the other hand, the government maintains that the move is intended at improving society’s general state and that people will see beneficial results in the long run.
Impact of Demonetisation
1. While many people were against the move, here are some of the benefits:
2. The Modi government’s move has largely destroyed black money.
3. The political parties and ministers who used illegal money for campaigning and other activities were taken aback by the news. It put a stop to these parties’ shady tactics for gaining votes.
4. The amount of black money in the real estate market has decreased dramatically.
5. Hawala transactions that support terrorism have been halted.
6. It has also had a negative impact on Maoists and their movements.