Black Money vs White Money
The furor and anger generated by widespread corruption and the illegal practice of stashing away money in Swiss banks is at its peak in India at the moment. There have been scores of cases of high level corruption such as 2G scam, and politicians, even ministers have been sent to jail with investigations in alleged irregularities to profit illegally revealing black money exchanging hands between corporate sector and politicians. This black money is often deposited in Swiss banks and never sees the light of the day. This is the money that has been created using unfair means and no taxes have been paid. There are many more differences between black money and white money which will be discussed in this article to enable readers to come to grips with this boiling issue.
The recent events such as protests by eminent social activist and Gandhian Anna Hazare and Yoga guru Baba Ramdev have given vent to popular discontent and grouse of the common people about money illegally earned by businessmen and bribes taken by ministers. Most of this illegal money is deposited in banks abroad, mainly Swiss banks where rules are such that one does not have to verify the legality of the money being deposited. Switzerland has become a safe heaven for people who have earned black money as they find it safe to stash their money in Swiss banks. It is clear that income earned illegally cannot be kept openly in India as it is deemed black money and one has to face provisions of income tax and pay penalty or even may have to serve a prison term which is why people deposit black money in Swiss banks.
White money is the income that one generates after paying taxes as per the provisions and can keep openly in his bank account and also spend it in any manner he wants. On the other hand, kickbacks, bribes, money earned through corruption, and money that has been saved utilizing unfair means is called black money. As income and sale taxes have not been paid on such money, this money needs to be kept underground. Corrupt politicians and bureaucrats have been earning black money since independence and the malady has pervaded all sections of society; so much so that it has made India one of the most corrupt countries in the world. There is a huge outcry not only among the intelligentsia but also those who are the oppressed and made to pay bribes to get their work done by government officials. This public anger is reflected in the protests being led by Anna Hazare and Baba Ramdev. Sensing the pulse of the society, government has bent a little and is engaged in drafting of a Lokpal Bill along with members of the civil society to create an ombudsman who is thought to be a cure of the cancer called corruption in the country.
What are the differences between Black Money and White Money?
Coming back to differences in white and black money, one big difference is that black money does not get circulated and remains in the possession of the person who earns it and thus harms the economy as it is not reinvested for productive purposes. There are estimations that the amount of black money in India might be to the tune of an economy bigger than the white money economy in India. There are suggestions that black money holders be given a chance to declare their assets so that they can be taxed and money be used for the betterment of weaker sections of the society. However, there are many who are of opposing view as they feel that legalizing black money is tantamount to sanctioning amnesty to black money holders. They feel that such people should be punished and their property be declared government money so that deterrence is created and people in future might not be tempted to accrue black money without any fear.