What is Black Money | Meaning & Effects to the Economy

Through this post, I just want to draw your attention towards the right meaning of Black money and how does it affect the economy of our country and may be able to change someone’s other opinion.

It’s been a long time; I am writing a post. And I’m writing because of removing the confusion in every body’s mind about this concept. Friends I’m talking about the very common problem about which every single person starts its debate, and that is “Black money”.


Black money means the amount of money which is unaccounted/unrecorded and may be earned illegally.


You heard this words at various locations like schools, homes, or at News. Do you know what exactly these words mean??. That’s my today topic; I just hope that you will quite understand this and share this with your other mates and may be able to change their opinion.

A common layman thinks that the money which is earned through the way of corruption is referred as black money. But here I want to change a little bit, money which is unrecorded in the books of accounts and also you are not paying any income tax for it may be you are not earning it legally. That is Black money guys.

Let’s consider an example if there is a 10rs. Note in your pocket, and there is no record that from where you got that, then it’s also be considered as black money. Black money also includes the money of corruption because it is the money you got over your income and also without rendering any of the legal services for it.

It is not a part of your income. Because your income is recorded in the books of accounts of any form.or in income tax department.


Limitations and effects of Black money to the economy:

  • One of the basic problems that caused due to black money is fall in the GDP(Gross Domestic Product) of the country. Because GDP is directly related to the investment and expenditure in the economy and due to the stock of black money people faces a lack of their disposable income.
  • The main problem with black money is that it creates the situation of deflation in the economy. Because everyone who has black money will think to store his not to invest his money.So it creates Deflation.
  • Also, the government will also not be able to spend money on public welfare. Because we all know that if black money tends to rise then, the government will receive less amount of tax money and will also spend lesser.
  • Due to less expenditure on public welfare, then the standard of living of the residents will decrease.

It’s all just because of unwanted stock of money (black money). If all these money be invested in the economy, then it will lead to the Ideal economy. And living standards of people also will improve.

Conclusion: Through this post, I just wanted to draw your attention towards the right meaning of Black money and how does it affect the economy of our country and may be able to change someone’s other opinion.

Hope you enjoyed the post. Stay fit, stay happy, pay taxes and keep your environment clean. If you like this leave a thumbs up below and please comment, your comments will help us to improve ourselves.

Thank you.

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