Black Money
Black money refers to money that is not fully legitimate property of the owner. A white paper on black money in India by the Government of India suggests two possible sources of black money in India. The first includes activities not permissible under the law, like crime, drug trade, terrorism, and corruption, all of which are illegal in India. The second, more likely source is that the wealth may have been generated through a lawful activity but accumulated by failing to declare income and pay taxes. Some of this black money ends up in illicit financial flows across international borders, such as deposits in tax haven countries.
A November 2010 report from the Washington-based Global Financial Integrity estimates that over a 60 year period, India lost US$213 billion in illicit financial flows beginning in 1948; adjusted for inflation, this is estimated to be 462 billion in 2010 dollars, or about $8 billion per year ($7 per capita per year). The report also estimated the size of India's underground economy at approximately US$640 billion at the end of 2008 or roughly 50% of the nation's GDP.
Read more about this topic: Corruption In India
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