Black Money and Demonetisation

Abstract

ABSTRACT

The recent demonetization of high value currency by the Government of India was with objective to unearth the black money, and to curb the corruption, counterfeit currency as well as terror financing. Black money is that money on which tax is not paid to the government and which goes unaccounted in the duration of country’s tax assessment period causing big revenue losses to the government. The biggest mission of demonetization is described as fighting black money. India’s economy historically holds a big parallel economy where unreported income is the norm. It is argued that demonetization of higher currency notes can help curbing black money in the country and this decision was considered as biggest cleanliness drive against the black money in the history of Indian economy.