Day 93 – Q 3.How is black economy an internal security threat? Analyse. What are the measures in place to tackle black economy? Discuss.

3. How is black economy an internal security threat? Analyse. What are the measures in place to tackle black economy? Discuss.  

काली अर्थव्यवस्था एक आंतरिक सुरक्षा खतरा कैसे है? विश्लेषण करें। काली अर्थव्यवस्था से निपटने के उपाय क्या हैं? चर्चा करें।

Introduction:

Black economy is based on the unaccounted money of the people and is also known as the ‘Parallel economy’. It is a great menace to the Indian economy. Black money is nothing but money generated in transactions which are hidden from Government in order to avoid tax. This is usually done in cash because cash transactions do not reveal the identity of the person carrying out the transaction. It’s elimination will help the society in more than one way..

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Black economy an internal security threat 

Black economy is the main source of resources for all the major internal security issues of India.

• Economic terrorism

The country has to contend with Economic terrorism. Pakistan has been flooding the country with counterfeit currency with a view to subverting its economy and funding terrorist activities in different parts of the country.

It is estimated that Pakistan pumped in 16 billion worth of FICN into India in 2010, a figure that rose to 20 billion in 2011 and 25 billion in 2012.

• Organised crime

Organised crimes in India especially in metro cities such as Mumbai and Delhi are rising due to flourishing parallel economy. Such organised criminals also fund for radicalisation of youth and terrorist attacks.

• Religious or ideological extremism

Parallel economy is greatest source of financial help to extremists. Financial incentives lure unemployed youth towards antinational activities in the name of particular religion or ideology.

• Cybercrime

Crypto-currency and unrecorded cash transaction in e-commerce are also emerging means to supply resources to hostile elements in the country.

• Armed violence

Armed violence which was hitherto legacy of Maoists or insurgencies is now taking a new form throughout India especially in the form of right wing extremism. Recently there has been reports of seizure of illegal weapons and public firing by individuals. Black money is easy source of illegal arms trade in India.

Measures taken by Government to contain parallel economy

• Voluntary income declaration schemes, such as Gareeb Kalyan Yojana
• Demonetisation
• Tax reforms; GST
• The Benami Transactions (Prohibition) Act
• Prevention of Money Laundering Act
• Financial Action Task force; for international cooperation in case of terror funding
• Reviewing of Double Taxation Avoidance Agreements
• Formalization of economy
• Banking reforms
• Promotion of cash less economy: Digitisation of economy

Conclusion

Though we have taken many measures to contain the parallel economy but success is far below the potential. Political will to curb corruption and organised crime, and poverty alleviation along with social will to remove the cancer of black economy from society can only lead to elimination of parallel economy and subsequently control over internal security of the country.