What is parallel economy?
India's parallel economy is so deeply entrenched that possession of black money is not even considered worthy of reproach in social reckoning. In fact, custodians of the administrative machinery themselves seem to have joined the race to accumulate such wealth.
Estimates of black money, unrecorded and untaxed, circulating in the economy have varied widely from time to time. In 1967-68, it was placed at Rs 3,034 crore. But by 1978-79, it had soared to Rs 46,867 crores more than 15 times in just 12 years. Black money was estimated to be 9.5% of GDP in 1967-68, rising to 49% of GDP in 1978-79 and 50.7% in 1987-88. This is an alarming rise, and had better information been publicly available on the trend, the pressure for market reforms may have come much soonersaving India the delay that gave China its headstart.
By the early 1980s, the problem was virtually blaring bright red danger signals. By one count, the rate of growth in the parallel econom ...more