There are crucial sectors in Indian economy which act as breeding ground for black money. Identifying and regulating them holistically is the need of the hour. Analyse (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· On the highly complex and emotive issue of black money, the Parliamentary Standing Committee on Finance in March tabled its 73rd report on the status of unaccounted wealth.
· However, the fact that the estimates of the size of the black economy in India varied from 7 per cent to 120 per cent of GDP is a matter of surprise — and some concern.
Yellow metal
· While black money generation in gold is primarily export-driven, for diamonds it is largely import-driven.
· While gold frauds add to black money generation within India, diamond may be misused to legitimise black money by inserting it into the financial mainstream and facilitating transfer of this illicit wealth abroad.
· UN COMTRADE (International Trade Statistics Database) reveals that over the past 10 years, in quantity terms, 75 per cent to 85 per cent of India’s gold jewellery export is made only to two countries, viz the UAE and the US.
Diamond trade
· UN COMTRADE data indicates that more than three-fourths of Indian rough diamond imports in caratage (quantity terms) are from Belgium and the UAE.
· Notwithstanding the major trading country status of the two countries, a closer look at this sector is required for black money estimation.
Intangible sectors
· Imports of services, such as software, consultancy and tours and travels, result in outflow of foreign exchange, which is indeed welcome for genuine transactions.
· However, these imports of services, when they are fake transactions, may also be used for laundering money.
· Globally, intangibles contribute significantly to illicit money transfers using the formal banking channels.
· The use of intangibles is preferred because it is difficult to establish whether services were actually offered or not, as unlike trade in goods, there is hardly any physical footprint of these transactions.
Identifying these sectors, dealing with them holistically and introducing fair-trade practices would make them globally competitive.
Priyadharshini D 5 years
Please Review. Thank you
IAS Parliament 5 years
Good attempt. Try to include about intangible sector like services. Keep Writing.
Neha sharma 5 years
Pl review.. Thank you
IAS Parliament 5 years
Good attempt. Factors behind Black money is not needed. Keep Writing.
Shantanu tiwari 5 years
Please review
IAS Parliament 5 years
Good answer. Keep Writing.
Shivangi 5 years
Please review.
IAS Parliament 5 years
Try to discuss about circulation of black money in gold diamond, intangible sectors like services, outflow of forex etc. Keep Writing.
Loading Comments