Parallel Economy- An outcome from black money
Basic definition of the economy –
The economy is a complex collection of interrelated production, consumption, and trade practices that help decide how limited resources are distributed. Creation, purchase, and delivery of goods and services are used to satisfy the needs of those living and working within the economy, which is often alluded to as the economic structure.
From where parallel economy came –
The parallel economy, often articulated as a the challenge to our economy has been profoundly embedded in our economic structures. The unrecognized income that is concealed from the tax administrators are known as black money. In India, the black economy is so profoundly rooted that it might be a waste of effort even if anyone attempts to take about such an improvement.
The operation of every unrecognized or unmentioned the economic system, the basic principle of which funds the functioning of the said sector disproves the legal goals set by the sanctioned/registered / legitimate the sector is defined as a parallel economy. More precisely, the parallel economy perpetuates all modes of operation from which black income is produced, in particular those that are not counted of.
Generally referred to as black capital or black market, the parallel economy has a significant impact on the country's economic structure. As part of society, the general public would expect the policymaker to be just, however because of the unrecognized market, the outcome of GDP would not be helpful for policymakers to create policies that appeal to all.
When the parallel market tried to evolve its branch through all aspects of our economy, citizens began to exert power over the political sphere by financing the political parties so that they could monopolize the whole economic structure.
Reasons of the parallel economy
The reason is fairly enough cleared in the previous paragraph, the reason for this negative alternate economy is the black money which has born through corruption and greed full activities. This is a vicious loop of money, corruption, and economy wherein the one who has power and handful of money survives and the one who has absolutely no association with this suffers that is the poor and middle-class sector of our society.
Tax provisions are one of the major cause, as implementation of a percentage on a certain amount molds people to avoid it and hence generating black money but this is not only one cause to take the load of the topic extensively, there’s funding to political parties so that they can easily pass through difficulties they may face which is eventually because of corruption.
Recovery of the black money and cutting down of parallel economy –
In 2016, the Modi government announced demonetization
to extract all the black money from corrupt politicians to a wealthy businessman
, but such an extreme step did not work out the way it was planned, as
corruption has deep-rooted itself on such major levels. Parallel economy have
been alive for so long that it won’t die so smoothly. Rectification shall start from the start of these roots, as corruption won't let us reach out to their ends.