What is Black money? Discuss various measures undertaken by government to curb and control black money.
Government’s white paper defines Black money as the aggregates of incomes which are taxable but not reported to the tax authorities either during generation or possession. Black money is posing serious challenge to the security of India.
Various measures have been undertaken to curb and control black money
- Income declaration scheme and Pradhanmantri garib Kalyan Yojana: An amnesty Scheme to encourage voluntary disclosure of black money and avoid prosecution after paying a fine of 50% on the undisclosed income. An additional 25% of the undisclosed income is invested in the scheme which can be refunded after four years, without any interest.
- Amendment to Benami properties transaction act: To provide with a wider definition to Benami properties and to provide with robust structural mechanism to deal with black money.
- Promoting Cashless Economy: So as to ensure better control over money flow in the economy and prevent creation of black money.
- Special Investigation team under Justice Shah: To unearth the black money stacked in the country.
- Demonetisation: To bring out the black money or flush it out of the economy by making it redundant.
- Transparency in political funding: By limiting the anonymous cash donations to Rs 2000 and introduction electoral bonds to prevent entry of black money in politics.
- Project Insight: To curb the circulation of black money.
These measures are good step in the direction to curb black money but were unable to uproot black money from the society. Ex: Demonetization did very little to address the black money but was a great contributor to give thrust to formalisation of economy and encourage cashless transactions. But these will aid fight against black money in long run.