Understanding The Black Economy And Black Money In India [Arun Kumar] on Amazon.com. *FREE* shipping on qualifying offers. The Narendra Modi government's sudden demonetization of `500 and `1, 000 notes in November 2016 failed to put a dent in the black economy but caused untold hardship to hundreds of. Jayant Oak, Supvr working in Defence Organization, I am in possession Identity Card issued by Ministry of Defece, Govt. Of India have completed 36 years of.

When the government announced the demonetization of all Rs 500 and Rs 1,000 notes in November 2016, it said it was doing so for two reasons — it wanted to eliminate counterfeit currency used by terrorists and smugglers, and it wanted to destroy the black economy by forcing the ‘de-hoarding’ of cash held by those generating black income. The objectives of the government were laudable, but it seems as though the scheme was imposed on the country with little or no forethought. First, it must be understood that the black money the government was targeting is only about 1 per cent of the black wealth held in the country and only 3.5 per cent of the black income generated in 2016. Even if the government managed to suck out all the black cash in circulation, it would not have much effect on the black economy which involves various activities in which black incomes are generated.

It does not stop these activities from continuing. Moreover, 80 per cent of the Rs500 and Rs1,000 notes (which constituted 86 per cent of the cash in circulation) was not black money, but rather white money used by businesses and citizens. Not only do a vast majority of Indians, rich and poor, use cash and not credit cards for daily financial transactions but businesses need it for working capital to buy raw materials, pay wages and other requirements for production and sales. Making the situation worse was the inept execution of the demonetization scheme. If over 85 per cent of a country’s currency is demonetized at one go, replacing it will take months if not years. The capacity to print notes is limited, especially if smaller denomination notes are required.

ATMs had to be reconfigured to take in the new notes (as they were of different dimensions than the ones they were replacing) and this apparently was not thought of and took much longer than anticipated. I will not go into the sloppiness of execution as this has been widely discussed in great detail. What I would like to point out is the fallacious thinking behind the scheme, including factors such as the following: • Only a small amount of the black economy would be affected by the demonetization • Much of the money that was demonetized was not black cash. • According to the Pew Research Centre, in 2015, only 22 per cent of adults in India had access to the internet. This means the vast majority who do not have access to the internet will be unable to use online banking. • Only 17 per cent of Indians have access to smart phones and consequently to mobile phone banking.

• In a population of 1.3 billion and counting, there are 24.5 million credit cards and 661.8 million debit cards. A fairly large number of Indians do not have access to credit or debit cards. Most small business do not have card readers so the cashless economy the prime minister and his cheerleaders have been talking of cannot become a reality overnight.

A deserted market in November 2016 after demonetization. Markets saw a decrease in average footfall. (Praveen Kumar/Hindustan Times) • It is unlikely that black marketeers and other generators of black money will suffer because the biggest fish were able to quickly convert whatever black cash they had into white. Some of the avenues used, according to media reports, were the purchase of jewellery, cash donations to temples, conversion of old notes to new notes with the connivance of corrupt bank officials and circulation through the Jan Dhan accounts of the poor. In other words, despite the massive exercise of demonetization, the total amount of black cash that has been demobilized is very small. • It was not explained why when high currency notes were being demonetized — as they were the choice of currency for black income generators to hoard — currency of even higher denomination (the Rs2,000 note) was being introduced.

Surely, this would be even easier to hoard? • Further, it was thought that the scheme would nullify the counterfeit currency which is thought to be used to finance terrorist activity. However, what doesn’t seem to have been taken into account is that each counterfeit note can only be used by a terrorist once to finance terrorist activity; counterfeit currency is therefore constantly being generated and the onetime extinguishing of counterfeit currency does not solve the problem. Moreover, if the old notes could be counterfeited it is likely that the same will happen to the new notes. It must also be understood that terrorist activity is not just financed with Indian currency, it can be and is fuelled by dollars, gold, diamonds, drugs and so on. Terrorism is a continuing problem, not a one-off thing. Waiting outside a bank in New Delhi in November, 2016.

(Ravi Choudhary/HT Photo) In sum, the demonetization scheme will not solve the problem of the black economy. However, the economy has been hit. The livelihoods of the poor and small traders who depend overwhelmingly on cash have been especially hit hard. They have had to reduce their expenditures, leading to decline in demand across the economy. The well-off sections facing uncertainty have also cut back discretionary expenditure on things like white goods.

All this has impacted agriculture, services and industry. As the profits of industries decline, they may not be able to pay their loans soon so that the NPAs (nonperforming assets) in banks will rise. As a result of this, the capacity of the banks to lend will decline further.

Businesses facing excess capacity and uncertainty have cut back investment. Thus, since demonetization was announced, unemployment has risen, investment has fallen, banks are facing difficulties and the crisis in agriculture has been aggravated in spite of a good monsoon. All this leads to the emergence of recessionary conditions in the economy. The notion that if a few lakh crores of old notes do not return to the banks, it will somehow become available to the government which it can spend on schemes for the poor is unlikely to be realized since, according to reports, most of the old notes seem to have been returned.

Arun Kumar (Courtesy Aleph) It was also believed that when banks become flush with funds they could give these out as loans. It was argued that interest rates could be lowered so as to boost investment. But as soon as enough cash is available people will withdraw their money. So, this is a temporary deposit and can only be seen as short-term lending. Further, to begin with, the bankers were too busy dealing with cash to focus on lending. Regarding lower interest rates leading to an increase in investment, this is unlikely to take place since when capacity utilization is low, investments do not take place. In the US, Eurozone, etc., in spite of interest rates being close to zero, investment did not revive for a long time after the 2007 economic meltdown.

It has been argued that the budget could stand to benefit through increased tax collection as the black economy declines. However, as argued, the black economy is unlikely to be impacted by demonetization. Even if there is an effect, it will be small. The bigger impact is likely to be the advent of recessionary conditions and a decline in production and incomes which will adversely affect tax collection, leading to an increase in deficit and additional problems for the government. Read more: There could be a benefit over the medium term. The organized sector and some sections of the unorganized sector may move towards using less cash.

The government is pushing hard for it and so are the companies involved in electronic banking and related financial companies. Even though all this will take time, it could help make the economy more efficient in the medium run. The proponents of this move expect that people using electronic transfers of money will leave a trail which will make it more difficult to generate black incomes. If this comes about, the demonetization would have been of some use, but all this lies in the future and there is no guarantee that it will happen. Moreover, this move could have been initiated independently of demonetization and with adequate preparation. In brief, the demonetization scheme has had deleterious short, mid-term and long-term effects. Meanwhile, illegal activities, black markets and real estate scams, the production of spurious drugs, capitation fees and various other components of the black economy will carry on after a brief hiatus.

Over the years, development had started in Wadala adjacent to the railway tracks and a large colony began to form. In 2006, the took action and cleared the area of slums. Illegal housing in India consists of built on land not owned by the residents (i.e., ) and constructed on land not owned by the builders or developers. Although illegal buildings may afford some basic services, such as, in general, illegal housing does not provide services that afford for healthy, safe environments.

Collapses of illegal buildings made with inadequate building supplies and practices may result in the deaths of their occupants. A recent example is the of an eight-story building in the area of, in the greater area; 72 people were killed in the collapse.

Strategies to curb or mitigate illegal housing include creating more affordable housing structures, redeveloping the safe illegal buildings, developing a plan of action for residents of shanties or illegal buildings, and policing the construction of illegal buildings or shanties. Download Hexen 2 Full Version. Contents • • • • • • • • • • • • • • Definition [ ] Illegal housing is a activity, where individuals either encroach upon property illegally or pay for housing that is illegal. In such cases, there are little or no public services or utilities.

In some cases electricity or water is accessed illegally. Illness is an issue due to poor water supply and the unavailability of sewage and garbage services. To ensure continued residency in the illegally occupied area, its inhabitants generally bribe corrupt officials, in India. More often than not, relationships with municipal offices, police and local representatives are organised by a third party with interests in ensuring that the illegal housing is not demolished. Because illegal property is not taxed, there is no income stream to pay for health or other municipal services that are required for its inhabitants. Stamp Duty Issues—contempt of courts There is rampant contempt of courts & therefore it is very difficult to get the written word of the law enforced.

Maharashtra is one of the forward looking states but then too, it is very difficult to put a stop to the illegality of the contempt of courts because the bureaucracy & the political establishment is simply not bothered. One of the examples of contempt of courts taking place on everyday basis & almost in every valuation of property is reproduced below to give you an idea of the ground reality.

A.The Supreme Court has ruled that the reckoner value cannot be used for arriving at the Market Value. The Mumbai Stamp authorities have given undertaking to the Bombay HC that reckoner value will not be used will not be used for Market Value determination. Individual property valuation has to be carried out based on the Spot verification. No penalty can be levied after reasonable period. Contempt of the courts instances are enumerated below with applicable citations: A. Supreme Court has given an important judgement on ready reckoner/guideline issued by the Stamp Authorities in Jawajee Nagnatham V. Revenue Divisional Officer, Adilabad and Others (1994) 4 SCC 595 The Supreme Court held that the basic value register of guideline or ready reckoner by whatever name called has no statutory force and value of each immovable property comprised in the instrument has to be decided according to the Rules governing true market value.

The valuation department has to make valuation of each individual property according to the Rules prescribed under the Stamp Act. The Mumbai Stamp Authorities have given undertaking to the Bombay High Court that Ready Reckoner values will not be used for property valuation. The said undertaking is given in the case of Ashok Bansilal Mutha vs. State of Maharashtra & Ors. How can the Undertaking given to the Bombay High Court be violated? (Breach of Undertaking given to a court on the faith of which the court sanctions a course of action is misconduct amounting to contempt of court. (The action of authorities in respect of A & B is willful, deliberate & in clear disregard of Apex court’s order & civil contempt as held in.

Inspector General of Registration, Pune, Maharashtra is fully aware that as on date in all payments of stamp duty cases, the calculations are made on the basis of ready reckoner rate it & Chief Secretary, GoM is fully aware of it but then contempt of the SC & the UT given to the Bombay HC do not even bother these officials. The matter is brought to the attention of the Chief Minister as well as the Governor of Maharashtra but to no avail. Why these authorities are not willing to stem the rot? Is revenue collection so important that the law laid down by the Supreme Court & Undertaking given to the Bombay High Court can be violated at will by the authorities! There is on the Spot verification required to be carried out by the designated departmental officer. This verification report is essential to arrive at the individual property valuation then how can this be discarded without assigning any reason contrary to the ruling of the Supreme Court as held in Jawajee Nagnatham supra.

If the authorities are not in a position to comply with the laid down law then why they have not approached the Supreme Court to review & modify the order? The High court ruling has ruled in that power to levy penalty should be exercised within a reasonable time. The reasonable time is not beyond 3 years as such as held in NEELDHARA citation.

The Stamp authorities merrily raise short Stamp duty payment demands even after 15–20 years after the stamp duty payment in case of deemed conveyance & demand penalty @ 2% per month or up to 400% of the deficit. The department has the stamp duty records since the payment of duty then why the assessment is not completed & how & why the citizens are held to a ransom when they come for deemed conveyance? Why the officials not held liable for dereliction of duty & not completing the assessment of duty payment. The Supreme Court has ruled in that reasoned speaking order is indispensable part of basic rule of law and mandatory requirement of procedural law by practice and by virtue of judge made law. However, the demand notices do not contain any detail about how the valuation has been arrived at all. The Demand Notices are very cryptic & devoid of any material details about how the valuation is carried out. This again is a deliberate attempt to escape responsibility & accountability & bulldoze the citizen to succumb to the high handedness of the authorities.

On the other hand, the responsibility of conveyance is on the builders then why the Govt. Of Maharashtra should not levy penalty on the builders if the conveyance is not completed within 4 months of the society formation. Why the property buyers should bear the brunt of negligence of builders & why the State government should side with the builders at the cost of the buyers of flats.

Therefore, for getting deemed conveyance, each & every member of the society is made to shell out several thousand rupees as bribe contribution for deemed conveyance for the Co-operative Housing Society Limited. Further, as pointed out, individual members are subject to penalty even after 15–20 years of having paid the stamp duty on the basis of reckoner rate which is contempt of Supreme Court & Undertaking given to the Bombay High Court. Since the responsibility of conveyance is on the builder, the Chief Minister, Maharashtra should ensure that defaulter pays & levy penalty on the builder for not completing conveyance.

The CHSL should not be compelled to shell out bribes for getting deemed conveyance. No short payment penalty of 400% can then be levied on the society members as per the law settled by the SC & if the assessment of the stamp duty payment is carried out immediately after payment. This assessment is carried out by the authorities in case the document is being registered in any case then why the same is not carried out in those cases where the buyers don't proceed with registration? If assessments are carried out fairly as per the law laid down by the Supreme Court then cheating of the CHSL members stops automatically. History and background [ ] Legal environment [ ] Ineffective and policies beginning in the 1950s and building height and of the 1970s have 'single-handedly exacerbated overcrowding and lack of urban space in India several times over,' according to Vinayak Chatterjee, government and private sector consultant. India had the world's lowest percentage of affordable housing by the 1980s., author of Imagining India: The idea of a Renewed Nation commented: A series of well-meaning but horribly counterproductive laws passed during this decade [1970s], which gave an immense leg up to interest groups in the city.

The rent-control legislation and the had effects that, in the best of social tradition, were just the opposite of what they intended. The rent act, by stating minimal leasing periods and strict eviction limits, basically gave renters carte blanche to squat and quickly took unoccupied housing off the market, and the land ceiling act shifted large amounts of land into the illegal market. The real estate development market in Indian can exhibit and tendencies. Since the 1990s all of 's available private land has been controlled by a small group of development organisations where land is 'released in small quantities when prices were high.' Governmental agencies, like the (DDA), control the real estate market place since the Delhi Development Act of 1957, which prevents private developers from entering the market. The multiple initiative was launched in 2005, but ineffective due to poor execution. Greater success could be found through improved, fair and effective regulation; stronger engagement of the private sector; and policies that allow for use of private capital.

Enabling city governments to become more effective urban managers, through coordination or delegation of duties performed at the state level and training, will also create an environment for more effective urban renewal projects. The early years of the 21st century have seen a worsening of urban services, including housing, resulting in 'informal, non-state solutions' such as local efforts to provide utility services to slums for a fee. Overpopulation and inadequate affordable housing [ ] The reported by 2013 that there are approximately 19 million families without affordable housing. A lack of housing coupled with high population growth, and has resulted in individuals living in low-cost illegal buildings or building or huts on illegal land.

For instance, many people have moved to the greater Mumbai area in search of jobs, and without affordable housing, thousands sleep in slums or on the streets. As a result, there is a trend of increased illegal housing in municipalities within Mumbai Metropolitan Development Authority.

In the Thane district alone, there were reported to be 500,000 illegal buildings by 2010. Further complicating land development projects, groupings of huts or shanties on illegal land can stall projects until there is a plan and action taken to remove or relocate the squatters.

Illegal housing [ ] Illegal buildings [ ]. 23 dead bodies following the collapse of an illegal building in Bellary, on 26 January 2010. To meet the demands of people moving to New Delhi, Mumbai and other large cities for jobs, and due to the unavailability of affordable housing, there are many buildings constructed illegally. The buildings are often created quickly.

Some builders neither follow proper building practices and laws, nor execute proper safety measures. Poor construction materials are also to blame in these circumstances. Within the Mumbai region there are estimated to be hundreds of illegal structures that have been built. Sameer Hashmi, BBC reporter, reports that activists 'allege that unscrupulous builders often pay hefty bribes to authorities who turn a blind eye to these illegal structures and do not take any action against the builders.'

Building collapses [ ] In the wake of the that killed 72 people, RT News reported that '.incidents of this kind are not rare in India, where builders often care more for cutting construction expenses than for the security and quality of the work being done.' In New Delhi in November 2010, there were 67 people or more killed from the collapse of an apartment building. Illegal huts or shanties [ ] Huts or shanties built on illegal land are sometimes assembled with brick and concrete, but often made with, and. Hut communities, or, may be managed by slum lords, which may have access to water, but rarely sewer facilities. The term 'slum' does not in all cases mean that the community is an illegal one; some slums are legal housing communities. As of 2009 there were about 170 million people living in slums.

About 66% of Mumbai's residents live in shanties, including about 40% of the city's police force. Mumbai's largest organisation,, has leased access to public lands that they have gained through squatting. Political dynamics [ ] Actions and reactions to illegal housing run the gamut from entitlement to eviction. In 1991, a project called 'Operation Eviction' of 's government, thousands of people from slums were transported great distances from slum home. In the previous decade, the Chief Minister, handed out land rights, called pattas, to illegal communities. Strategies [ ] Strategies for curbing and managing illegal structures include: Affordable Housing • Construction of affordable housing, perhaps replicating the model used in Mumbai Identify and take action on illegal buildings • Increased policing to curb illegal building construction • Establish call centres to field complaints and track actions taken • Use technology to identify illegal buildings Development schemes • Redevelopment of existing, structurally sound illegal buildings • town planning for illegal, dangerous buildings See also [ ] • • • • • • • • • • Sanitation • • Notes [ ]. • Sharad Vyas; Surendra Gangan (4 April 2006).

Retrieved 25 June 2009. [ ] • ^ Arun Kumar (2002). Black Economy In India. Penguin Books India. • Jawajee Nagnatham vs Revenue Divisional Officer.

On 25 January 1994 Equivalent citations: 1994 (1) BLJR 744, JT 1994 (2) SC 604, 1994 (2) SCALE 298, (1994) 4 SCC 595, 1994 1 SCR 368, 1994 (2) UJ 17 SC Bench: K Ramaswamy, N Venkatachala • Contempt Petition No. 28 of 1993 • Noorali Babul Thanewala v. Shetty, AIR 1990 S.C.

1994 • Amar Bahadurising v. Wasnik & others.

J 1359 • 2007 (210) E.L.T. 658 (P & H) in case of NEELDHARA WEAVING FACTORY Versus DGFT, NEW DELHI • 2011 (22) S.T.R. 105 (S.C.) ASSTT. COMMR., COMMERCIAL TAX DEPARTMENT Versus SHUKLA & BROTHERS • ^ (2009). Imagining India: The @idea of a Renewed Nation. Imagining India: The @idea of a Renewed Nation.

Imagining India: The @idea of a Renewed Nation. Pp. 170–171, 493.. Imagining India: The @idea of a Renewed Nation.

Imagining India: The @idea of a Renewed Nation. • ^ Prakash, Vivek.. Retrieved 6 April 2013.

5 April 2013. Retrieved 5 April 2013. Times of India. 6 April 2013. Retrieved 7 April 2013. • HT Correspondent (5 July 2011)..

Hindustan Times. Archived from on 5 March 2013. Retrieved 7 April 2013. • Pradeep Gupta (26 October 2012).. Times of India. Retrieved 7 April 2013. January 29, 2010.

Retrieved April 7, 2013. 7 April 2013.

Retrieved April 7, 2013. 7 April 2013. Retrieved 8 April 2013. 5 April 2013. Retrieved 5 April 2013. Retrieved 6 April 2013. Imagining India: The @idea of a Renewed Nation.

Pp. 205–206, 225.. • United Nations human settlements programme (2003).

The Challenge of Slums: Global Report on Human Settlements 2003 (4th edition). Times of India. 6 April 2013. Retrieved 7 April 2013.

• ^ Alok Deshpande, Meena Menon (7 April 2013).. Retrieved 9 April 2013. Further reading [ ] Wikimedia Commons has media related to. Books • Leslie Kilmartin, Harjinder Singh (1992). 'Housing in the Third World: Analyses and Solutions'. Concept Publishing Company..

Missing or empty url= () • United Nations human settlements programme (2003). The Challenge of Slums: Global Report on Human Settlements 2003 (4th edition). Newspaper articles • Nitin Yeshwantrao, TNN (8 April 2013)... Retrieved 8 April 2013. • 'LDA's invitation to illegal societies'. New Delhi, India: Hindustan Times.

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