View
217
Download
0
Category
Preview:
Citation preview
8/19/2019 Project on parallel economy
1/22
1
MacroEconomics &Business
EnvironmentProject On:
Topic: Parallel Economy –Boon or Bane…!!!
PGDM 2"#$
%umitte' To: %umitte' By:Pro(essor )yotsna
*ajan
*a+ul %in,+
%art+a-
Mat+ur
%reejit+
Diva-ar
.arun
%+arma /uvraj .erma
00
10
2
$
2
8/19/2019 Project on parallel economy
2/22
8/19/2019 Project on parallel economy
3/22
INTRODUCTION
Econom consists o# economic sstem o# a countr or other area+ the labor+
capital and land resources+ and the economic a$ents that sociall participate in theproduction+ exchan$e+ distribution+ and consumption o# $oods and ser'ices o# that
area. ,ll kind o# pro#essions+ occupations+ economic a$ents or economic acti'ities+
contribute to the econom. "onsumption+ sa'in$ and in'estment are core
components in the econom and determine market e-uilibrium. ,n in#ormal
econom is economic acti'it that is neither taxed nor monitored b a $o'ernment+
contrasted ith a #ormal econom. The in#ormal econom is thus not included in that
$o'ernment/s &ross 0ational roduct &0. In#ormal economic acti'it is a
dnamic process hich includes man aspects o# economic and social theor
includin$ exchan$e+ re$ulation+ and en#orcement.
arallel econom means #unctionin$ o# an unsanctioned sector in the
econom hose objecti'es run parallel and in contradiction ith the objecti'es o#
o##icial or sanctioned or le$itimate sector in the same econom. This is 'ariousl
re#erred to as unaccounted econom/+ ille$al econom/+ subterranean econom/+
or unsanctioned econom/. ,ccordin$ to the . . 7an$nekar+ 8I# the arallel econom/ poses a
serious threat to stabilit and $roth o# the o##icial econom+ surel it stems #rom
the #act that the ma$nitude o# black‐mone/ is lar$e and ri$$ed deals are $roin$
in 'olume and complexit at an alarmin$ rate. ,part #rom the ide rami#ications o#
the parallel econom/+ one mi$ht also be ali'e to the #act that black incomes/ are
accentuatin$ the ine-ualities in income and ealth and breedin$ a ne class o#
black/ rich in a societ hich is alread harshl strati#ied.9
Ille$al econom is tax‐e'aded econom. It is possible to con'ert ille$al econom
or black mone into hite mone and 'ice 'ersa. :or example+ hen a person
mana$es to $et the receipt #rom the shopkeeper b pain$ the sales‐tax #or a
commodit but does not purchase it actuall+ he $enerates black mone as
reimbursement is made to him a$ainst the receipt. The mone not actuall paid is
the black mone in such a case. In such case+ the shopkeeper sells the same
commodit to another person ithout $i'in$ him an receipt #or it. ;n the other
3
8/19/2019 Project on parallel economy
4/22
hand+ i# a person purchases somethin$ sa+ a scooter+ or a
8/19/2019 Project on parallel economy
5/22
INTERN A T IONAL EXPE RI E N CE
arallel econom or black econom is existin$ in both de'eloped and
de'elopin$ countries. There is an abundance o# literature a'ailable upon
measurement techni-ues and about estimates o# parallel econom. , 'ariet o#
methods ha'e been used and the di##erent methods appear to $enerate idel
di'er$ent estimates.
Table 1 : Paallel Econo!" Esti!ates in De#elope$ Co%nties
Co%nt" Paallel Econo!" &as ' of (DP)
&reece+ Ital+ )pain+ ortu$al and =el$ium 24‐3*>)eden+ 0ora+ enmark+ Ireland+ :rance+
The 0etherlands+ &erman and &reat =ritain
13‐23>
?apan+ @),+ ,ustria and )itAerland (‐1*>
Table 1 sho that parallel econom exists in 'arious de'eloped countries all
thou$h their 'arious initiati'es ha'e been takin$ $o'ernments.
The estimates o# parallel econom in the context o# some o# the de'elopin$
countries are presented in Table 2.
Table *: Esti!ates of Paallel Econo!" in De#eloping Co%nties&eriodB 1!!*‐!3
Co%nt" Paallel Econo!" &as' of (DP)
Afica
0i$eria and E$pt 6(‐%6>Tunisia and Morocco 3!‐4!>
Cental an$ So%t+ A!eica
&uatemala+ Mexico+ eru and anama 4*‐6*>"hile+ "osta 7ica+
8/19/2019 Project on parallel economy
6/22
INDIAN EXPE RI E N CE
India/s black mone econom could be as hi$h as 3* per cent o# the $ross domestic
product &+ indicatin$ the siAe o# the parallel econom could be about 7s 2( lakh
crores.
The $o'ernment had asked three think tanks 0ational Institute o# ublic :inance and
olic+ 0ational Institute o# :inancial Mana$ement and 0ational "ouncil o# ,pplied
Economic 7esearch F to arri'e at an estimate o# black mone in the countr. The
three used 'arious methodolo$ies and ha'e $i'en 'arious estimates. , source in the
kno o# the ork done b the think tanks said one o# the estimates as on the basis
o# the methodolo$ used in a Gorld =ank research $roup report+ hich pe$$ed
India/s current black mone econom at about 3* per cent o# &.
The $o'ernment had asked the three think tanks to submit their reports and
su$$estions to tackle the problem b ecember 31. The reports o# the institutes are
no ith the #inance ministr+ hich is expected to present the #indin$s be#ore
arliament in the =ud$et session.
The Gorld =ank research $roup/s stud done in 2*1* F )hado Economies ,ll ;'er
the GorldB 0e Estimates #or 162 "ountries #rom 1!!! to 2**%+ b :riedrich
)chneider+ ,ndreas =uehn and "laudio E Montene$ro F is considered to be one o#
the most authentic report on the uno##icial econom across the $lobe. It estimated
India/s shado econom in 2**6 to be 25.1 per cent o# &+ a$ainst 22.! per cent in
1!!!.
7esults based on the assumptions similar to this research shoed India/s present
black mone econom to be around 3* per cent o# &+ said the source.
6
8/19/2019 Project on parallel economy
7/22
,ccordin$ to the Gorld =ank researchers/ paperB
8)hado econom included all marketHbased le$al
production o# $oods and ser'ices that are deliberatel
concealed #rom public authorities to a'oid pament o#
income+ 'alueHadded or other taxes or to a'oid pament
o# social securit contributions or ha'in$ to meet certain
le$al labour market standards+ such as minimum a$es+
maximum orkin$ hours+ sa#et standards and to a'oid
complin$ ith certain administrati'e procedures+ such
as completin$ statistical -uestionnaires or other
administrati'e #orms.9
,ccordin$ to their analsis+ the shado econom had reached remarkable
proportions+ ith an a'era$e 'alue o# 34.5 per cent o# o##icial & o'er 162 countries
beteen 1!!! and 2**6H2**%.
The research report #ound that a'era$e siAe o# the shado economies in the 162
selected countries de'elopin$ Eastern European and "entral ,sian+ as ell as hi$hH
income ;E" countries increased onl modestl #rom 33.% per cent o# o##icial &
in 1!!! to 35.5 per cent o# o##icial & in 2**%.
;E" the ;r$anisation #or Economic "oHoperation and e'elopment is a $roupin$
o# about 34 member nations+ accordin$ to its ebsite.
,O- IS UNACCOUNTED ONE/ ESTIATED0
;ne a is to look at the inputHoutput ratio. :or a particular amount o# input+ acountr should produce certain amount o# $oods. I# the output is less+ then there is
underreportin$ to that extent. This method #ails to account #or chan$es in the
structure o# the econom+ e##icienc $ains and technolo$.
,nother method is to look at the currenc in circulation ith re#erence to the siAe o#
the econom. It is based on the assumption that currenc is used b both the shado
and the re$ular econom. , small econom ha'in$ lot o# currenc in circulation ill
su$$est bi$ presence o# a parallel econom.
7
http://www.business-standard.com/search?type=news&q=Gdphttp://www.business-standard.com/search?type=news&q=Gdp
8/19/2019 Project on parallel economy
8/22
oe'er+ such estimation #ails to take into account the unor$anised sector.
8
8/19/2019 Project on parallel economy
9/22
,O- I( IS T,E LAC2 ECONO/ IN INDIA0
There is no reliable current measure a'ailable. Most estimates are old and su##er
#rom man shortcomin$s. ,n 0I: stud pe$$ed black mone in 1!(3H(4 beteen
7s 32+*** crore and 7s 3%+*** crore hich is 1!> and 21> o# &.
In 2*1*+ @)Hbased &lobal :inancial Inte$rit estimated that 462 billion ent out o#
India beteen 1!4( and 2**(. The $o'ernment has asked three institutions to
estimate black mone. The reports are expected toards the end o# the ear.
,O- IS T,E (O3ERNENT CURIN( IT0
The $o'ernment has empoered its existin$ institutions and set up ne
mechanisms and institutions to unearth black mone. The antimone launderin$ la
has been stren$thened and more entities ha'e been brou$ht under its ambit to
create a deterrent.
India has joined $lobal e##orts to tackle illicit #los and also si$ned in#ormation
exchan$e treaties ith man countries. The $radual reduction in income tax rates
has also helped impro'e compliance.
9
http://economictimes.indiatimes.com/topic/BLACK%20ECONOMYhttp://economictimes.indiatimes.com/topic/NIPFPhttp://economictimes.indiatimes.com/topic/GDPhttp://economictimes.indiatimes.com/topic/BLACK%20ECONOMYhttp://economictimes.indiatimes.com/topic/NIPFPhttp://economictimes.indiatimes.com/topic/GDP
8/19/2019 Project on parallel economy
10/22
A4OR ATT EPTS ADE T O ASSES S T, E L A C 2 ONE / IN
IN DI A
8/19/2019 Project on parallel economy
11/22
III. Rangne6a5s Esti!ateB .. 7an$nakar as a member o# the Ganchoo
"ommittee submitted his report in 1!(2 India Toda+ 2**5. ,ccordin$ to
7an$nekar+ tax e'aded income #or 1!61‐62 as the order o# 7s. 1+15*
crores+ as compared to the TE" estimate o# 7s. (5* crores. :or 1!65‐66+ it
as 7s. 2+3** crores+ as a$ainst 7s. 1+216 crores estimated b TE". The
projections o# black mone #or 1!6(‐6! and 1!6!‐%* ere 7s. 2+(33 crores
and 7s. 3+*(* crores respecti'el att and )undharam+ 2**4+ 3%(.
I3. C+opa5s Esti!ateB , "ommittee under ;.. "hopra as #ormed in 1!(2#or measurin$ black mone in India India Toda+ 2**5. ;.."hopra
prepared a series o# estimates o# black income here it increased #rom 7s.
!16 crores
6.1 percent o# & in 1!61‐62 to 7s.(*!( crores 1*.5 percent o# & in
1!%6‐%% har+ 2**3. The stud shoed that a buoant econom o##ers more
opportunities #or unaccounted income. urin$ periods o# recession+ it ma be di##icult
#or producers to exact unaccounted mone. "hopra also corroborates the hpothesis
that tax e'asion is more likel the hi$her the rate o# tax. is #indin$s also
support the hpothesis that increase in prices leads to an increase in unaccounted
income. :urther+ he #ound that #unds are di'erted to a$riculture to con'ert
unaccounted black income into le$al hite income att and )undharam+ 2**4+
3%!.
3. (%pta5s Esti!ateB &o'ernment o# India #ormed a committee under oonam
&upta and )anjee' &upta in 1!(1 #or calculatin$ black mone in India. Theused :ei$e/s method o# transaction income ratio to estimate black mone in a
countr. The used a'era$e o# three ears 'iA. 1!4!‐5*+ 1!5*‐51 and 1!51‐52
as the bench mark #or estimatin$ black mone #or the ear o# 1!6%‐6( to
1!%(‐%!. The estimated that it as 1!.(> o# & at market price. The
black mone increased #or 7s. 3*34 crores in 1!6%‐6( to 7s. 46(6% crores
in 1!%(‐%!. The main #indin$s o# studies on black mone ereB a , buoanteconom o##ers more opportunities #or unaccounted incomeJ b The ratio
11
8/19/2019 Project on parallel economy
12/22
o# unaccounted income to assessable non‐salar income has $one up a#ter
1!%3‐%4J c Increase in prices leads to an increase in black moneJ d
:unds are di'erted to a$riculture to con'ert black mone into hite moneJ
and e ;ne per cent increase in o'erall taxes leads to more than 3percent increase in the black econom relation to the o##icial econom Dekhi+
2**3+ 1!2.
The 0ational Institute o# ublic :inance and olic estimated that in 1!(5 amount o#
black mone in India as nearl 7s. 1+**+*** crore+ hich is approximatel 2*
percent o# the national income. In 1!!6+ the estimated black mone as belie'ed to
be more than 7s. 4+ **+*** crore The industan Times+ ?anuar 2*+ 1!!%.
Most o# India/s black mone ‐estimated to be about @)1 trillion h3.6%tn ‐is
belie'ed to be parked in bank accounts in )itAerland. ,ccordin$ to the )iss
=ankers ,ssociation+ )iss la and tax a$reements prohibit third countries #rom
$eneral searches #or possible tax e'aders+ or 8name‐#ishin$9 .The Indian
$o'ernment hopes that situation ill chan$e a#ter its tax treat ith the countr isre'ised "hopra+ 2*1* .
12
8/19/2019 Project on parallel economy
13/22
CAUSE S O7 ( E NER A TION O7 L A C 2 ONE/
There are man reasons #or the creation o# back mone in India. )ome o# them are
as #ollosB
i. Contols an$ licensing s"ste!: =lack mone is increasin$ in India #or the reasons o# controls+ permits+ -uotas and licenses.
ii. ,ig+e Rates of Ta8es: i$her rates o# taxes has resulted a $roin$
tendenc o# tax e'asion amon$ the tax paers. Tax e'asion is common in
income tax+ corporate tax+ corporation tax+ union excise duties+ custom
duties+ sales tax + etc.
iii. Ineffecti#e enfoce!ent of ta8 la9s: In India+ the en#orcement o# taxlas in respect o# income tax+ sales tax+ excise dut+ stamp dut etc. is
-uite eak. This has led to enormous unrestrained e'asion o# taxes and
pilin$ up o# black mone.
i#. 7%n$ing of political patiesB There is an upard tendenc o#
supportin$ o# political parties ith the help o# black mone. =i$ trade
houses are donatin$ an enormous amount o# black mone to the political
parties+ especiall the rulin$ part ith the sole objecti'e to tame thepolitical leadership #or deri'in$ undue pro#it b manipulatin$ polic
decisions Dekhi+ 2**3+ 1!3.
#. Secon$ -ol$ -a afte infl%ence: urin$ the time o# )econd Gorld
Gar+ a lot o# the Indian industr #ound circumstances #a'ourable #or black
marketin$. )uppl industrial $oods #rom the traditional supplies o# the
Gest ere cut‐o##+ hich resulted se'ere shorta$es in man essential
#ields. This #ormed the sentiment o# makin$ o# marketin$ mone out o#
shorta$es and not out o# extension o# the business acti'ities.
#i. Inflation: The addition in prices o# commodities like petrol+ etc. in
international market+ boost in prices o# commodities due to hi$h
increase in duties and taxes imposed b the $o'ernment+ the
conspicuous utiliAation created b people ith unaccountable mone+
di'ertin$ resources #rom manu#acture to speculation‐all these is the
13
8/19/2019 Project on parallel economy
14/22
root o# in#lation hich in turn creates black mone.
#ii. Agic%lt%al Inco!e: The reluctance to brin$ a$ricultural earnin$s in the
realm o# income tax has also contributed to creation o# black mone. =i$
industrial houses+ o'er the past #e decades ha'e entered the a$riculture
sector in a bi$ a b ac-uirin$ bi$ #arms. The black mone accrued #rom
other sources is sou$ht to be trans#ormed into hite b 'iein$ it on the
a$ricultural returns account.
#iii. Pi#atiation: ri'atiAation has opened up a ne area to the pri'ate
sector as ell as to ministers and bureaucrats #or makin$ black mone. It is
expected that man scams come to li$ht #or makin$ black mone throu$hpri'atiAation.
i8. Tansactions in Uban Real Estates: 7eal estate transaction is a
si$ni#icant source o# $eneratin$ black mone in India.
8. Ot+e 7actos: &eneration o# black income in a countr like India also
results #rom other di##erent acti'ities like smu$$lin$+ propert deals+
briber+ kick‐ backs+ commissions+ concealment o# income bpro#essionals+ artists etc. In this a an enormous amounts o# black
income incessantl results in enhancement o# the area and acti'ities o#
parallel econom Dekhi+ 2**3+ 1!4.
14
8/19/2019 Project on parallel economy
15/22
IPACT O 7 LAC2 INCOE O N T,E INDIAN ECONO/
&eneration o# black income and thereb establishment o# parallel econom has
been creatin$ the #olloin$ serious impacts on the social and economic sstem
o# the countr.
• =lack income has been causin$ underestimation o# & in India as an
enormous 'olume o# income is di'erted to this unaccounted sector resultin$
in $roin$ continuation o# parallel econom o# the countr. The direct e##ect o#
black income is the loss o# re'enue to the state exche-uer as a tax e'asion.
• =lack mone has resulted in the di'ersion o# resources #or the purchase o#
real estate and luxur housin$• =lack mone has resulted in trans#er o# #unds #rom India to #orei$n countries
throu$h clandestine channels har+ 2**3+ %21.
• The a'ailabilit o# black incomes ith businessmen and capitalists and the
conse-uent ine-ualities o# income place a lar$e amount o# #unds at their
disposal.
• , part o# the black incomes is held in cash and as a result there is an
abundance o# li-uidit hich becomes a'ailable throu$h the addition o# sa'in$s held in the #orm o# cash+ bullion+ $old+ sil'er+ etc.
• Mone e'aded b ille$itimate a is spent in undesirable and 'ul$ar manner.
8/19/2019 Project on parallel economy
16/22
( O 3E RN ENT INITI A TI3ES
The $o'ernment has taken a number o# steps to curb black mone. )earches+
seiAures+ sur'es+ and scrutin o# income tax returns are bein$ done b the Income
Tax epartment. ,mendments ha'e also been made to the :inance ,ct 2**4 tointensi# e##orts to curb black mone. These include prosecution #or #alsi#ication o#
books o# accounts and taxin$ o# $i#ts orth more than 7s. 25+ *** to unrelated
persons. There ha'e been to amendments o# the #or indi'iduals and 35>
in other cases. :urther+ the :inance Minister has announced that the declarantill not be liable to pa interest or penalties and ill be $ranted immunit #rom
16
8/19/2019 Project on parallel economy
17/22
prosecution under the Income tax ,ct 1!61+ Gealth tax ,ct+ 1!5%+ :orei$n
Exchan$e 7e$ulation ,ct+ 1!%3 and "ompanies ,ct+ 1!56. This scheme ill
remain in #orce till ecember 31+ 1!!% i$hli$hts o# @nion =ud$ets+ 1!!%.
iii. Special eae on$ Sc+e!e: =earer bonds ere most likel #irst used in
the @nited )tates durin$ the post‐"i'il Gar era to #und 7econstruction
1(65K 1((5. Lare bonds that are oned b hoe'er is holdin$ them+
rather than ha'in$ re$istered oners like most other securities. DikeLmost
other bonds+ the ha'e a stated maturit date and interest rate+ but coupons
representin$ interest paments are $enerall phsicall attached to the
securit and must be submitted to the compan #or pament =ern#eld+
2*1*. )pecial =earer =onds )cheme 1!(1 as intended #or canaliAin$
unaccounted mone #or producti'e purposes. The )pecial =earer =onds+
1!(1 o# the #ace 'alue o# 7s. 1*+*** each ere issued at par ith a maturit
period o# 1* ears.
i#. eas%es to C+ec6 Ta8 E#asion: ealin$ ith tax e'asion has alas
been one o# the most di##icult challen$es #or $o'ernments all round the orld.
Tax e'asion is done b indi'iduals belon$in$ to di##erent strata o# the societ
in di##erent as. ,s per the sur'es and reports+ there are man people
ho pro'ide #alse income details to the tax authorities to reduce the
amount o# liabilit. The income tax e'asion penalties can help the
$o'ernment reco'er maximum amounts in the #orm o# tax and utiliAe the
mone #or the bene#it o# the common public. Tax e'asion is one o# the basic
causes to $enerate the black income. There#ore+ 'arious measures ere
undertaken to plu$ the loopholes in tax e'asion. Most o# these measuresere based on the recommendations o# 'arious committees and
commissions viz Taxation En-uir "ommission 1!53+ ,dministrati'e
7e#orms "ommission 1!6!+ irect Tax En-uir "ommittee 1!%1 etc.
Most o# these recommendations ere an up$radin$ in tax las "harlie+
2*1*.
#. Econo!ic Libealiation: Introduction o# economic liberaliAation has
detached the re$ime o# controls and re$ulations and thereb the extent o#
17
8/19/2019 Project on parallel economy
18/22
black econom ould be reduced re$ularl Dekhi+ 2**3+ 1!6.
#i. Ot+e eas%es: The &o'ernment has also introduced some measures to
contain the $roth o# black income in the countr hich includes eposit inthe 0ational ousin$ =ank in 1!!1+ 07I #orei$n exchan$e remittance+ issuin$
0ational e'elopment =onds in @) dollars+ controllin$ the election expenses
incurred b the candidates+ conductin$ searches+ seiAures+ raids and other
steps to plu$ loopholes in the tax administration etc.
In ?ul 1!!1+ the @nion :inance Minister projected a ne scheme‐0ational
ousin$ =ank )cheme to persuade black mone back into the le$itimate
operations o# the national econom. The scheme o##ered possessors o#
unaccounted #or mone an opportunit to deposit an -uantit o# mone ith a
maximum limit o# 7s. 1**** ith 0= ithout disclosin$ the basis o# #unds.
REPORT O7 S-ISS AN2
In the )iss =ank 7eports o# 2*15+ India has mo'ed don to 61st place in
terms o# #orei$ners mone in )iss banks and it no accounts #or a mea$re *.123
percent o# the total $lobal ealth orth 1.6 trillion in )itAerlands bankin$ sstem.
Ghile the @ and the @) ha'e retained their top to positions ith the lar$est
shares o# the #orei$n clients mone ith )iss banks+ akistan has inched up to
%3rd place.
The )iss =ank once released its 2**6 report in hich it disclosed the total dollars
o# people countrHise. The list as just $rouped b countrHise.
T; 5 ";@0T7IE)
India H 1+456 billion7ussia H 4%* billion
@ H 3!* billion@kraine H 1** billion
"hina H !6 billion
18
8/19/2019 Project on parallel economy
19/22
India ith 1456 billion or 1.4 trillion has more mone in )iss banks than rest o#the orld combined.
19
8/19/2019 Project on parallel economy
20/22
SU((ESTIONS
1. &o'ernment #inancial structure need to be re'ised in term o# #orex and mone
market.
2. Transparent in#ormation sstems need to be implemented #or better communication.3. i##erent #inancial ser'ice pro'iders+ banks and le$islators are doin$ much to #i$ht
a$ainst mone launderin$. Ge approach a 3 solution #or these authorities and
these ould be
N no our customer O"B #inancial back$round o# customer helps to reduce an
concealed risk.
N no our transaction OTB unusual transact could be identi#iable b dail
research.N no our process OB ith the help o# intelli$ent clari#ication #ormulas and step
b step clari#ication process complete input data could be a'ailable.
4. Taxation la should be structured in such a manner that tax e'asion becomes
impossible.
5. Instead o# direct cash trans#er+ bank trans#er should be encoura$ed. @se o# plastic
mone in @ and other de'eloped countries helped tem a lot to pre'ent parallel
econom and mone launderin$. )o that e'er transaction in terms o# mone bein$recorded and maintained e##icientl.
6. Ge su$$est #ocusin$ on #inancial literac and brin$in$ remittance users into the
#ormal #inancial sector.
%. 0eed to impose hea' #ines or le$al actions to those ho commits an criminal
o##ense o# this kind.
(. &o'ernment should launch some pro$rammes re$ardin$ #inancial literac hich can
help under pri'ile$e persons to $et some knoled$e about this racket and the pit#allsthe ha'e in their dail li'es.
!. The 0arcotic epartment also needs to be on their toes because e all kno that
most o# the ille$al ealth is trans#erred b smu$$lers usin$ cocaine and band dru$s.
1*.Terrorism #inancin$ is another omen that as been destroin$ our econom #or the last
to decades. )o the 7esearch and ,nalsis Gin$ 7,G+ Intelli$ence =ureau I=
and other intelli$ent a$encies need to take ade-uate actions to pre'ent terrorism
#inancin$.
20
8/19/2019 Project on parallel economy
21/22
11.There should be a ceilin$ o# an amount that ho much mone a person can remit to
their home countr based on their job or occupation and strict 'i$ilance need to be
implemented.
12.=etter coHoperation should be there beteen the countries so that the could #i$ht
this menace ith joint e##ort.
13.The &o'ernment also need to de'elop separate department hich ill deal ith this
matter and can implement ne le$islations ith e##icienc.
14., mechanism o# reportin$ pro$ress need to be established hich ensures ade-uate
communication beteen Da and :inance Ministr.
21
8/19/2019 Project on parallel economy
22/22
CONCLUSION
arallel econom is a ne threat #or the Indian econom. In India parallel
econom is expandin$ 'er rapidl. &o'ernment o# India introduced commissions
under aldor+ Ganchoo+ 7an$nekar+ "hopra+ and &upta #or estimatin$ black
econom. There are man #actors like "ontrols and Dicensin$ )stem+ i$her
7ates o# Taxes+ Ine##ecti'e En#orcement o# Tax Das+ In#lation+ :undin$ o# political
parties etc. that in#luence its $roth.
In India amount o# black mone are increasin$ continuousl hich badl impacts the
economic $roth o# the nation. )uch mone is a ne challen$e #or Indian
econom. Indian econom is badl a##ected b black mone as it is
underestimatin$ &+ increasin$ ine-ualit o# income+ increasin$ ille$al acti'ities
etc. ;'er the past 5* ears+ the $o'ernment has at 'arious times announced se'eral
schemes o##erin$ opportunities to brin$ black mone o'erboard but the result are
not so e##ecti'e. )ome o# these schemes areB introducin$ the scheme o# )pecial
=earer =onds+ demonetiAin$ hi$h denomination currenc notes+ strin$ent raids and
scheme o# 'oluntar disclosures. These instruments are expected to reduce the
'olume o# the black econom.
22
Recommended