The cause behind all the ills in the economy which include high level of inflation, asset price boom, inequality of income, law and order problem, frequent bouts of terrorism, social unrest, degeneration of society to live by any unethical means etc can be attributed to among other things uncontrolled generation of black money. Despite administrative and several fiscal measures in force, the generation of black money continues unabated leading to destabilization of the economy, disturbance of the financial system , and erosion of confidence in having a peaceful and comfortable social life.
Inflation continues to remain high and insensitive to the measures from monetary and fiscal authorities. These measures will have effect only if the entire financial system is under the control of authorities and actions initiated even against creation and circulation of black money. It is a matter of serious doubt as to whether RBI and the Government have a grip over the entire financial system where black money both in local and foreign currencies rule the roost. The measures to contain black money do not seem to have attracted the desired attention of authorities. This may be due to very obvious reason as the survival of politicians, bureaucrats, industrialists, large farmers, highly placed professionals and criminals having nexus with all categories of people who matter in an economy, depends to a great extent on the generation and proliferation of black money. As long as the system permits to liberally generate black money , one cannot expect to have satisfactory control over inflation, law and order problem, terrorism and all other ills experienced by the society.
Values and ethics by and large have been given a go –bye and greed and fraud have emerged as a way of life. As money has no value, life also has no value. Deaths are reported as if the dead will come back alive after some lapse of time. These situations are avoidable to a reasonable level in an upcoming economy where people look forward to a happy, comfortable and peaceful life. unfortunately the existence of unlimited quantum of black money and the facilities and incentives knowingly or unknowingly built-up to generate any amount of such money prevent the economy from becoming a welfare society. The adage money is the root cause of all evils holds good and people irrespective of religion, caste, creed, position and from all walks of life try to possess and accumulate the money at any cost, legally or illegally ignoring the ethics, values and needs.
Roughly the black money and the fake currencies in circulation would be equal to the white money in circulation if not more. With liberalization and globalization of the economy the black money and fake currencies can be found both in domestic and foreign currencies as well. While white money circulation can be kept under check to a great extent with monetary policies, the black money generation cannot be so easily curbed unless there is coordinated approach from administrative, fiscal and monetary policy authorities. Here in lies the problem.
Sources of black money are very many and it is beyond anybody’s imagination. Corruption which is the main source of black money is rampant and more or less institutionalized though not legalized. It is not an exaggeration to say that right from cradle to grave one has to literally bribe to live through. Otherwise living in India is a miracle or a mystery!! Survival since birth is greater task unless one is fortunate to find place in any three categories of classification shown below.
1. People occupying position of power and capable of influencing
2. People having sufficient money including black money to throw around to get things done
3. People enjoying both power and money to curry favour.
People not falling in any of these categories, survival is only for the sake of survival and definitely driven by self motivation to survive. These people are susceptible to be lured by money to indulge in anti-social activities and are not bound by values in life.
Other sources of black money can be largely found in all dealings, in agriculture, trade and commerce. It is difficult to have any dealings in real estate without involving black money. So is the case in starting any business or industry. Export import business has its own way of generating black money both in domestic and foreign currency. Contributions to charities, temples and churches help to generate black money. System provides attractive incentives and comforts to deal in black money .It also encourages conversion of white money into black money. The result is simultaneous circulation of both white and black money ,creating chaos , providing space for easy maneuverability to destabilize any system,and affording opportunities to make quick money in the garb of innovations . Black money supports all unethical activities and it is akin to a very wide open floodgate without any hurdles to stop it from doing the damages.
Containing the excess money whether it is black or white in an economy is a big challenge. It requires meticulous planning, harsh decisions and execution of policies. It is high time some serious thought is given to the subject and meaningful and result oriented actions are initiated soon. Fortunately, the country has the capacity, resources and all potential to make it a strong economy and a welfare society but the mindset has to change. What is required is integrity of thought and sincerity in actions.
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