Convertibility of Black Convertibility of Black Money to White MoneyMoney to White Money

(Against)(Against)Group 8_BGroup 8_B

P Sudhindra ReddyP Sudhindra ReddyAmit ChhedaAmit Chheda

IntroductionIntroduction

What is ‘Black Money’What is ‘Black Money’

Causes of Black MoneyCauses of Black Money

Consequences of the Black MoneyConsequences of the Black Money

Controlling the Black MoneyControlling the Black Money

What is Black Money?What is Black Money?Black money is essentially the Black money is essentially the

currency used in ‘black economy’.currency used in ‘black economy’.Black, shadow, underground, Black, shadow, underground,

unobserved, unofficial, unobserved, unofficial, subterranean, unrecorded, informal, subterranean, unrecorded, informal, irregular, second, twilight, parallel – irregular, second, twilight, parallel – are all the synonyms used for the are all the synonyms used for the ‘shadow economy’.‘shadow economy’.

‘‘market based production of goods market based production of goods and services, whether legal or illegal, and services, whether legal or illegal, that escape detection in the official that escape detection in the official estimates of GDP’estimates of GDP’

Causes of Black MoneyCauses of Black Money

Corrupt Politicians & BureaucratsCorrupt Politicians & BureaucratsComplex Tax StructureComplex Tax Structure Intensity of RegulationsIntensity of RegulationsCriminal ActivitiesCriminal Activities Inefficient & Corrupt I.T. & Vigilance Inefficient & Corrupt I.T. & Vigilance

Dept.Dept.Declining Morale to Pay TaxesDeclining Morale to Pay Taxes

Consequences of Black Consequences of Black MoneyMoney

Decrease in Govt. RevenuesDecrease in Govt. RevenuesDecrease in quality & quantity of Decrease in quality & quantity of

Public Goods & ServicesPublic Goods & ServicesHigher Taxes & InflationHigher Taxes & InflationDifficulty in Monetary & Fiscal Policy Difficulty in Monetary & Fiscal Policy

FormulationFormulation Increase in Criminal ActivitiesIncrease in Criminal Activities

Controlling the Black MoneyControlling the Black Money

Conversion from Black to WhiteConversion from Black to White

Mauritius RouteMauritius Route Amnesty Schemes (VDIS)Amnesty Schemes (VDIS)

Demonetising Higher Denomination Demonetising Higher Denomination CurrencyCurrency

Special BondsSpecial Bonds

Controlling the Black MoneyControlling the Black Money Prevention of Black MoneyPrevention of Black Money

Proper Tax Structure (GST, VAT)Proper Tax Structure (GST, VAT) Simple Rules & RegulationsSimple Rules & Regulations Use of e-MoneyUse of e-Money More Banking Transactions More Banking Transactions Use of PAN & Identity ProofsUse of PAN & Identity Proofs Efficient & Powerful I.T. & Vigilance Efficient & Powerful I.T. & Vigilance

Dept.Dept. Awareness of Benefits of Tax PaymentAwareness of Benefits of Tax Payment

ConclusionConclusion

Conversion of Black Money to White Conversion of Black Money to White Money is a Short-term Symptom Money is a Short-term Symptom based Remedy, while the Prevention based Remedy, while the Prevention measures mentioned treat the Root measures mentioned treat the Root Cause of the Black Money.Cause of the Black Money.