1. ‘Black money can be smart strategy for inefficient economy’

‘Black money can be smart strategy for inefficient economy’

If use of local currency or other forms of money has proven effective in countering debt money, black money can prove...

By: | New Delhi | Published: March 8, 2015 3:41 PM
A Tryst with Money, A Tryst with Money book, black money, black money infrastructure The book says though black money is viewed as cheaper money, it is not a true assertion. Whenever a system tilts to one side, new forces will prop up to offer counter balance.

If use of local currency or other forms of money has proven effective in countering debt money, black money can prove to be smart strategy especially for an inefficient economy, says a new book.

“In the Indian context, one of the high-ranking black-market operating countries, it is a combination of curse and boon. It is a curse because if black-market economy were to merge with the mainstream economy, India will probably be one of the top economies in the world right at this moment,” writes Samar Vijay in “A Tryst with Money: An Account of our Journey with Money to an Unknown Destination”.

Besides, tax collection will jump overnight and our government will not be running a fiscal deficit budget, he says.

The book says though black money is viewed as cheaper money, it is not a true assertion. Whenever a system tilts to one side, new forces will prop up to offer counter balance.

“Black money is the fallout of mainstream money. These are notorious brats who deliberately evaded tax. If it were possible to impose tax on black money, it would be treated equivalent to its ‘white’ counterpart.

“In other words, black money has tax component removed from it. Clearly black money has an edge over white money, which is subjected to government’s share,” the book says.

According to the author, black money undoubtedly enjoys the benefit of tax advantage but the advantage does not just get passed to the beholder so easily.

“Natural reaction to any free advantage in the system is that every stakeholder would want a piece of it. This is the reason why prices of goods in black economy are relatively higher than the ones transacted in white money. Apparently, black money does get taxed, indirectly,” says Vijay, who runs private equity and financial advisory firm InvestCare.

The author says the book is “not a technical journal aiming to expose optical illusions; instead it is an effort to highlight the designs in which money operates. It offers a few tips that may help people take better decisions in matters related to money”.

Tags: Black Money
  1. M
    Mangoman
    Mar 9, 2015 at 9:39 am
    I would like to remind the author that black-money doesn't arise solely out of tax evasion; a much bigger portion is generated through blatant loot of public money by two-bit politicians (and babus)!! Businesses earning money legitimately and then evading tax, can be understood, if not condoned!! But politicians looting public-money can neither be understood nor be condoned!! For example, no body really knows how did Hasan Ali, a small-time s trader from Hyderabad turned into a stud-farm owner in Pune; or how did $8 billion come to his Swiss account! That Maratha strong-man Sharad Pawar is based in Baramati, a mere 40km from Pune, may be just a coincidence!! The same is true for Surbrata Roy of Sahara Group!! His proximity to MSY is just a coincidence you see!!
    Reply
    1. G
      Gangadharan Nair
      Mar 19, 2015 at 7:44 am
      BLACK MONEY is created through HIGH RATE OF TAXATION & CORRUPTION. Unless & until the Government addresses these two things generation of BLACK MONEY cannot be controlled. Make this nation, INDIA, a TAX HAVEN and introduce a very LOW rate of BANK TRANSACTION TAX, I that will help to control the generation of BLACK MONEY. Corruption can be controlled by freeing the common man who pays the bribe from the penal actions and allow him speak out the truth. 99% of harment bribe will be eradicated. But some bribes like donations to political parties and other NGOs cannot be controlled and that won't be a problem for the common man.
      Reply
      1. T
        t p
        Mar 8, 2015 at 5:36 pm
        Hope with the ouster of the Congress govt from most of the indian states & Delhi , problem of black money would not exist in india to the extend has been . Achchhe Din Aa Rahe Haen , Corrupt Jail Ja Rahe Haen .*** Jai Hind ***
        Reply

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