In order to analyse the extent of black money in the economy, it is important to understand the concept of parallel economy. Parallel economy or underground economy is where black money floats.
The existence of parallel economy does not only encourage earning of black money but also impacts our economy adversely by way of loss of revenue to the state due to, to name a few, tax evasion and unreported income which could have been taxed if reported. Aside from corruption in the government and black money earned by big businessmen, the black money market penetrates even the smaller sections of the society which equally poses a threat to our economy.
How many of us have had the experience of purchasing something from a shop and being asked if we wanted a receipt for it, as if it is a choice and not their obligation to give one? Or going to a grocery or a provision store where the so-called “pakka” receipts are hardly used and if you ask for the calculation of your bill amount, they produce a small scrap of paper and list down the amounts to total them, in other words, provide you with a “kaccha” receipt?
These transactions without proper records are treated as hidden transactions and contribute in their own way to the parallel economy. Thus, it is not only the big scams, but small transactions like these as well, which we are always too busy to notice, which contribute to the black money market. But how do we define black money and keep a tab on it. It is important to understand the exact meaning of black money in order to curb it.
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