Situation of black money or parallel economy in India | Black money in India is more than one fourth of its GDP

August 11th, 2010| In India.

Situation of black money or parallel economy in India | Black money in India is more than one fourth of its GDP

Indian economy is progressing.  Parallel economy is also progressing in the same speed.  The black money in India is more than 1/4th of India’s Gross Domestic Product (GDP). It is around 15 lakh crores of rupees according to the calculations of GDP.  This is the bitter truth that has come out in the World Bank research.  This was mentioned in the research document under the heading ‘Shadow Economies All over the World.  During the year 1999 -2000 black money in India was 23% of the GDP.  It increased to 25.6% in the year 2006-2007.  In these 9 years the black money in India has reached to 24% of the GDP.  The black money in India which was  4.10 lakh crores during 1999-2000 has become 9.60 lakh crores during 2006-2007.

To be clearer, if the 24% black money during these 9 years is compared to the latest GDP of 2009-10, the black money now in India is Rs.14 lakh crores.  If the 25.6% black money is compared to the latest GDP, black money in India is Rs.15 lakh crores.

During the previous 9 years, parallel economy (Black money) is increasing rapidly and if it is calculated till 2006-2007, the black money will be much more than anybody can expect, according to the World Bank in its Research Document.  The World Bank also says that it is not a surprise even if the black money in India amounts to Rs.20 – 25 lakh crore rupees.

World Bank has also commented that India has started economic reforms from the year 1900 and the taxes were lowered.  And the government control over many fields has also been decreased.  Generally when the taxes are more and government control is also more, black money increases.  But in India even after so many economic reforms, black money is increasing.  World Bank has surveyed the economy of 162 developed and developing countries including India.

There are many countries which top the list of black money.  Black money in Azerbaijan, which was a part of Soviet Union, is 63% of its economy. Georgia is one step ahead of Azerbaijan.  Black money in this country is 68% of its GDP.  This means these countries are almost run by the parallel economy.

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