It must also be said that the theoretical framework of the book remains as valid today as it did in 1999. The prologue discusses the different remedies to tackle the black economy that have been attempted by the present government. It is in this context that this book with a new prologue is being issued at this juncture.
Public curiosity/ awareness of the issue has suddenly increased by leaps and bounds. Thus, the economy would suffer for much longer and irreversibilities have already set in, pushing the economy towards a recession.Īll this happening in the context of the black economy has again brought this topic to the centre stage. Not only will the currency shortage continue due to insufficient printing capacity but those with black money are first replenishing their coffers causing a shortage of cash available to the public. The prime minister promised normalization in fifty days but that cannot happen since so much currency cannot be printed in such a short time. Thus, the culprits who were supposed to be punished by the demonetization have escaped while the innocent have been trapped into standing in queues or by unemployment. The implication is that those who held substantial black cash have managed to exchange their old notes for new ones. According to reports, much of the high-denomination notes issued by the RBI are coming back into the banks. Thus, it is impacting those who never generated black incomes or held much of the high denomination currency notes. The impact on the poor, the farmers, workers and producers in the unorganized sectors has already been severe.
The present move will not be able to tackle the black economy but has the potential to devastate the economy. But none of them had the same dramatic impact on the economy since they were not comparable in order of magnitude that demonetization is. It has got the approval for many bills, for example, on Benami Property, Black Money held abroad and Income Declaration Scheme. It started its journey by forming a special investigation team (SIT) under a Supreme Court order in 2014. It is not that this is the first step that the present government has taken to tackle the black economy. The black economy is once again in the news because of the announcement of demonetization of the large-denomination currency notes.
A ground-breaking book, The Black Economy in India in India shows how demonetization is not the way to end the black economy, since what India needs is to empower citizens and make leaders accountable. He has a master’s degree in physics from Delhi University and Princeton University, USA, and a doctorate in economics from JNU.
Arun Kumar taught economics at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, Delhi, till 2015.
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