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>actually not that significant or deleterious, but a convenient political talking point. This is not true. This is a problem that significantly impacts the eco

>actually not that significant or deleterious, but a convenient political talking point. This is not true. This is a problem that significantly impacts the economy and visibly changes the equation for the middle class. Real estate, cars, and other things you'd consider somewhat essential to an average household are artificially priced because of the purchasing power of people with "Black money". It is more than a political talking point.

wyager 10y ago
Do you have a scientific study backing this up? You just restated the claim that it is a problem.
- bharath28 10y ago
  > a scientific study backing this up? As opposed to the "impression" you got that this was a convenient political talking point? I've bought real estate in India and visibly saw the effects in the last decade - inflation without commensurate change in infrastructure. As to your question of studies, here are some starting points (some dating as far back as 1995). The problem is serious enough for the government to have set up 10+ independent commissions to investigate the issue (which are cited in the paper by the Ministry of Finance) - the net cost of the black economy is estimated to be ~12-20% of the GDP, which in my books counts as a serious issue http://finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf http://finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf http://www.idosi.org/mejsr/mejsr23(3)15/17.pdf http://www.idosi.org/mejsr/mejsr23(3)15/17.pdf http://www.jnu.ac.in/SIS/CITD/DiscussionPapers/Financial_Repression.pdf http://www.jnu.ac.in/SIS/CITD/DiscussionPapers/Financial_Rep... http://www.nipfp.org.in/media/medialibrary/2014/10/BLACK_MONEY__IN_THE_REAL_ESTATE_SECTOR_A_STUDY.pdf http://www.nipfp.org.in/media/medialibrary/2014/10/BLACK_MON... [Edit: Typo]
  - wyager 10y ago
    > inflation without commensurate change in infrastructure. Inflation isn't tied to infrastructure growth, so not sure why you would expect this In fact, if the government pulls this kind of stuff, one should expect to see inflation without any benefit attached. As I said, messing with money's fungibility makes it less valuable. > The problem is serious enough for the government Yes, for the government; it hurts their tax revenue. That doesn't mean it's bad for the economy. I'll read those links when I get home. >the net cost of the black economy is estimated to be ~12-20% of the GDP, Black markets almost always increase production. People use them because they're more efficient than government-controlled markets. When they say "costs" they probably mean "the government loses access to".

wyager 10y ago

Do you have a scientific study backing this up? You just restated the claim that it is a problem.

bharath28 10y ago
> a scientific study backing this up? As opposed to the "impression" you got that this was a convenient political talking point? I've bought real estate in India and visibly saw the effects in the last decade - inflation without commensurate change in infrastructure. As to your question of studies, here are some starting points (some dating as far back as 1995). The problem is serious enough for the government to have set up 10+ independent commissions to investigate the issue (which are cited in the paper by the Ministry of Finance) - the net cost of the black economy is estimated to be ~12-20% of the GDP, which in my books counts as a serious issue http://finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf http://finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf https://rbidocs.rbi.org.in/rdocs/publications/pdfs/73533.pdf http://www.idosi.org/mejsr/mejsr23(3)15/17.pdf http://www.idosi.org/mejsr/mejsr23(3)15/17.pdf http://www.jnu.ac.in/SIS/CITD/DiscussionPapers/Financial_Repression.pdf http://www.jnu.ac.in/SIS/CITD/DiscussionPapers/Financial_Rep... http://www.nipfp.org.in/media/medialibrary/2014/10/BLACK_MONEY__IN_THE_REAL_ESTATE_SECTOR_A_STUDY.pdf http://www.nipfp.org.in/media/medialibrary/2014/10/BLACK_MON... [Edit: Typo]
- wyager 10y ago
  > inflation without commensurate change in infrastructure. Inflation isn't tied to infrastructure growth, so not sure why you would expect this In fact, if the government pulls this kind of stuff, one should expect to see inflation without any benefit attached. As I said, messing with money's fungibility makes it less valuable. > The problem is serious enough for the government Yes, for the government; it hurts their tax revenue. That doesn't mean it's bad for the economy. I'll read those links when I get home. >the net cost of the black economy is estimated to be ~12-20% of the GDP, Black markets almost always increase production. People use them because they're more efficient than government-controlled markets. When they say "costs" they probably mean "the government loses access to".