Black Money And Indian Economy Essay

Q. Demonetisation and Black Money: Discuss the impact of recent demonetization on black money in India.
Nov 14, 2016Related to : GS Paper-3

Ans :

Introduction-

Recently Indian government has demonetized the high value currencies i.e currency notes of 500 and 1000 with objective to unearth the black money, and to curb the corruption, counterfeit currency as well as terror financing. This decision was considered as biggest cleanliness drive against the black money in the history of Indian economy. But there is various view of experts on demonetisation, as some argues that it will will hit the black money and other argued in negative.

How it will curb black money-

  • In India all sections of the society are accustomed to use cash transactions, and this habit is unscrupulously misused by some bad elements of the society. Such habit resulted in even people with accounted money are started using cash transaction for high value transactions.
  • It is resulted into parallel economy with unaccounted money, even much stronger than regular economy. The parallel economy black money, corruption, counterfeit currency and terror financing. These issues hampered growth and development of the economy.
  • In this background demonetarisation of Rs 500 and Rs 1,000 currency notes as a master stroke, as the move will address issues like black money and corruption and also help the economy become more digital.
  • The move will either unearth the black money slashed in the form of cash or forces to destroy those unaccounted currencies. Demonetisation will curb the menace of black money and will help check stashing of funds to a large extent.
  • Similarly it has major impact on corruption that exists in India and also on financing of terror activities in India. Hence it was considered as courageous step in the fight against unaccounted money.

Some argues against of it-

  • Currently high-value currency notes accounts for the value of 86% of the notes in circulation in India.
  • According to some estimates the size of the black economy in India range from 20% to 60% of GDP and more and the currency in circulation is just 12% of GDP. 
  • Even if more than 50% of money in circulation is black money, but most of it will find its way back to the banking system one way or another, and be recycled as new notes. 
  • According to some experts, the black money holders, tax evaders and corrupt official may not slash these money in cash in their homes due to sheer scale of logistics.
  • Generally many viewed that tax evaded income mostly invested in companies, real estate and these people may not be affected due to demonetization.
  • Hence these experts argue that, demonetisation may not yield desired results against black money, rather it creates inconvenience to the general people. 

Conclusion-

Central government’s recent decision to demonetise the high value currency is one of the major step towards the eradication of black money in India. The demonetization drive will affect some extent to the general public, but for larger interest of the country such decisions are inevitable. Also it may not curb black money fully, but definitely it has major impact in curbing black money to large extent.

Every person in India must have heard the word “Black Money” in last 4-5 years. But do we understand what this black money really is? As per Investopedia, “Black money is money which is earned through any illegal activity. These transactions generally are done in form of cash and are not taxed. One must need to hide this black money, and use in the underground economy.” To bring it back in the regular market, they need to do money laundering.

Black money creates a lot of problems in Indian society like bribery, corruption, terrorist activity funding and much more. P.M. Narendra Modi initiated the demonetization of rupees 500 and rupees 1000 notes. This was one of the most important and critical decisions made by Narendra Modi to curb corruption and the black money from India.

So, now we have little bit idea about black money and the problem caused by it. Now, let’s discuss it in form of essay and a short speech.

Want to deliver a perfect speech? Check out these great tips for winning the speech game. 😀

A short speech Black Money in India

Respected chief guest, Principal madam, teacher and all the friends present here a very good morning to you all. Today I will be talking about one of the most important topics in current Indian society that is black money. Let me start by telling you that there is a lot of politics going on around the black money and corruption. I am trying to be as neutral as possible in this context. I don’t want to be sound like a supporter of the particular party.

Do you ever wonder why these people stash black money? Most of them do it to save the tax, some of them use it for bribery/corruption. And some of these anti-society elements used this black money for funding terrorist activities. Black money is also used for political means, like for funding different activities, good or bad and even for buying the politicians during election time. Same black money is distributed for various election marketing related activities.

We always blame the politicians and rich people for this but have you ever thought that we are also part of the problem. You must have seen your parents bribing district authority for getting some certificate, or giving money to jump the line in the temple. We do this kind of things. This kind of society behaviors provokes these money launderers to play with black money.

To make a real change in Indian society, we need to be the part of the solution. Definitely, there will be solutions needed from the government side too, one good news is that Prime Minister Narendra Modi already started demonetization and other activities to control the corruption and black money.

What can we do? Think for a minute. You don’t need to start a big movement or be part of a social activity, you can do something on your own. Stop giving bribe to government authorities. This small step of yours can lead to a big change. We blame the government for all the problems, we as citizens of this country should take initiative and start solving problems on our own. Once we start doing it then government don’t have any excuse not to be part of this moment.

On this note, I would like to end my speech. I like to thank principal madam for allowing me to speak on this topic. Thank you very much all for listening to me, I hope we’ll see a corruption free country in our lifetime. Thank you very much again, have a nice day.

Essay on Black Money in India

Black money and related corruption activities are one of the biggest problems in India right now. Prime Minister Narendra Modi is trying to control all these activities by demonetization and related solutions. But his problem is not that small to be solved within such small time frame. As per various reports, billions of dollars of illegally stashed in tax havens. Most of it is stored in Swiss banks.

Impact of Black Money on Indian Society and Economy

Black money cripples the government as it is not able to collect the tax on these financial transactions. This makes a big impact on the development of the country, as money collected in form of tax is used for development of the country.

One of the biggest impacts of black money and corruption is people get used to these illegal shortcuts to get their work done. And then government authorities or people in power take advantage of it. People like me and you get used to it and unknowingly we also become part of the problem.

India has very low “Ease of doing business” rating in international economic forums. This means India is not a good place to do business. Legal rules, red tape, bribery, corruption stops foreign companies to invest in India. That is turn slows down the progress.

Solutions for Black money problem | How to fight, stop, eradicate black money and corruption. 

When we talk about a solution for black money, we target government for it. Yes, the government must bring in powerful solutions. But if we as the citizen of India are not taking part in it then it is not going to work. What we said earlier is “We are part of the problem” so, “we also need to be part of the solution”. People who invade tax, launder money are from us only. If we change, society will change. Young Indians like me want to see a “Corruption Free” India in our lifetime. Following are the ways we can stop, reduce, fight and eradicate the corruption and black money.

  • Never give or take the bribe.
  • If a someone asks for a bribe, report it immediately.
  • Government processes tend to take time. Have patience.
  • If a government employee, an officer is not doing his/her work or using his/her power for his/her own profit or threaten people, immediately report it to the authorities.
  • Don’t break the law so you don’t have to bribe.

Tips for Speech, Essay and Paragraph writing

What we saw in the last couple of speech and essay articles is you guys are looking for speeches and essays in various word length like 100, 150, 200, 150, 300, 500 0r 1000 words. Rather than repeating the same topic with a little bit of different language and in various length, we kept only two parts. You can refer both parts for your speech or essay preparation.

  1. Practice speech before friends or mirror
  2. You can use information from both sections for paragraph writing too.
  3. Do not mug up the given information as it is. Add your own flair and emotions to it.

If you are preparing for an anchoring or compering script then also you can use above content. And you like our article then don’t forget to appreciate our work, you just need to leave a comment in the comment box. 🙂

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