Monday, February 14, 2011

Corruption and Black Money Centres

In the country where corruption is in all spheres of life and all sectors of economic activity, certain areas account for more than 90 % of money generated through corruption which finds its way into black money and its further multiplication.Corrupt practices include bribe giving and receiving, tax avoidance and black money generation. These areas belong to multitude of government departments, professionals and business activities in small and large enterprise. Therefore stringent controls and checks on government machinery and the business activities mentioned in the following paragraphs can result in eradication of the menace of corruption and black money to a large extent.
All corruption and black money emanates from the deeds and actions of politicians and government officials. The  bribery money in these hands is at the most 10% of the total black money generated whereas 90% goes into the businesses involved.This bribery is a very major contributor to the business world black money, and it contributes equally to the further snow balling effect it produces on black money generation. The loss to exchequer resulting because of bribery is of the order of 20% of the annual black money generated. This roughly amounts to about 2 Lakh crores annually.
The main beneficiaries of corruption amongst the government machinery are:

  • Licencing and allotment authorities
  • Public works department including M.E.S
  • Excise and Taxation authorities
  • Income Tax authorities
  • Police authorities
  • Land and property registration authorities
Amongst the general public the main beneficiaries of corruption are:
  • Self employed persons like advocates, doctors, architects and engineering consultants etc.
  • Shopkeepers whether petty, small, medium or big dealing in retail business of provision and general stores, cloth and ready made garments, construction and house building materials, hardware including plumbing and bathroom accessories, electrical cables, fittings and accessories, as also timber, plywood,glass etc..
  • Tutors and teachers indulging in private tuition
  • Property dealers and real estate agents
Amongst the businesses most involved in corrupt practices are:
  • Real estate and construction business is perhaps the biggest absorber and creator of corruption and black money. 
  • Gold and Jewellery  business
  • Businesses related to manufacture of wafers, namkeens, confectionery items, gachhak & chikki and other eating accompaniments.
  • Businesses of small and big eateries, Dhabas, Restaurants, Indian sweet shops (Halwais)
  • Education Business
  • The whole of small scale manufacturing sector which neither accounts for the earnings of the manufacturer nor the retailer.
The real estate, construction, gold & jewelery businesses need a special mention as majority of black money gets absorbed in these sectors and they are the biggest motivators for falling into the trap of corruption.