black economy presentation

8/3/2019 Black Economy Presentation

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BLACK

ECONOMY


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WHAT IS BLACK ECONOMY??

A hidden sector of the economywhere

private cash transactions gounreported.

It is a sector of economicactivities

involving illegal economicactivitiesincluding buying and selling ofdrugs.

That part of an economy that is


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HOW IT IS FORMED??

Your rightful indulgenceslike shopping, eating out,

going tomovies, most certainlyhave abolstering effect on the

economy. But, there exists a dark

side which cleverly evadestaxes

to generate what iscollo uiall referred to as


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This sin economy,comprising fake andcounterfeit products,smuggled andpirated goods,unauthorized

gambling,bribery andprostitution, among ahost ofother sinister activitiesthat go unaccounted,has a draining effectonthe economy.

So Just how big is the


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Effects of black

Economy.

Affects public revenues.

Degenerates the investablesurplus.

Delimits the nationalproductivity.

Drains the balance ofpayments.

Distorts equity and equality

concepts of economicdistribution.


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EFFECTS ON INDIAN ECONOMY

While there are no authenticfigures, economists feel that itis in the region of 40% ofIndia is gross domestic product

(GDP).

Professor of economics,Jawaharlal University, ArunKumar, who has written one ofthe most authentic books onthe subject, The blackeconomy in India, puts thefigure at around 50% of theGDP.


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According to the latest

estimate of Central StatisticalOrganization(CSO), the size of the Indianeconomy is around Rs61,64,000crore.

Thus, the size of the blackeconomy,taking it at 40% of GDP, isaround Rs 25,00,000 crore or

around $500billion.

If all the estimated blackmoney is declared, it could

generate a taxrevenue of Rs 7 50 000 crore


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WHAT GOVERNMENT ISDOING??

Surely, the governmentcan make better use ofthis amount. Additionaltax income to thegovernment,would not only havehelpedthe government toexpandits welfare programmes,butalso enabled it to take up


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IMPACT ON VARIOUSINDUSTRIES.

The fast-moving consumergoods (FMCG) industry loses 6-7% of its turnover due tocounterfeit products and illegal

imports. The size of the FMCG industry is

around Rs 1,00,000 crore, whichpegs the losses to the sectorfrom counterfeiting at Rs 7,000crore.

With the excise rate applicableon personal care products being8%, the duty evasion is well overRs 500 crore annually.

It not only affects the industry

but, more importantly impacts,consumer interests


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Pharma is no different.Of

the drugs tested in acountrywide surveyconducted by the DrugController-General of India,0.4%

were found to be spurious.

The size of Indiaspharmaceutical industry isRs 90,000 crore and the

estimated size of thecounterfeitmarket is around Rs 360crore.

Apply a multiplier effect of


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For the music industry, theturnover is said to have declinedfrom Rs 1,200crore in early 2000s to around Rs600crore, mainly due to pirated musicCDsand DVDs.

The Rs 6,000 crore Indian filmindustry loses Rs 2,500 croreannually to piracy.

Over 800 million pirated DVDsdiscs are consumed in India

annually and 1million DVDs are added everymonth inIndia.

If there was no piracy, theestimated revenues earned b the


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CONCLUSION

Despite computerization andissuance of permanent accountnumber (PAN) to all the taxpayers,benami transactions are stillrampant.

According to a finance ministrysource,30% of the high-valuetransactions of total value of over Rs55 lakh crore are without PAN.

A majority of real estate transactionhave been reported without PAN.

The implementation of goods andservices tax (GST) is expected tohelp

contain the spread of black moneyin the

black economy presentation

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