Finance, Forex and Investments

What is the history and basis of the black economy in India?

No economy is a perfect economy. Govt. rules, taxes, corruption, etc are major factors of the strong existence of the black economy. Its an integral part of our nation's wealth and its everywhere. What is the anatomy / flowchart / whereabouts of this parallel world?

Public Comments

1. The black economy, parallel economy, or black market consists of all commerce on which applicable taxes are being evaded. The market includes not only illegally-prohibited and legally-prohibited commerce (for example, drugs, prostitution, guns and gambling activities that are illegal in some locales), but also trade in legal goods and services because some income is not reported and consequently taxation is evaded, e.g., through money laundering, or payment in cash, which is almost untraceable. The underground economy also includes transactions that governments may allow to be free of taxation, either by legal sanction or by simply choosing to refrain from enforcement of tax laws in certain markets. The term underground economy typically is not used to refer to trade in stolen goods, which is also given the name “black market”. Underground economy transactions are typically cash transactions to evade traceability by governments or complex financial operations involving the use of multiple subsidiaries and tax havens.