Arun Kumar is the country’s leading authority on black economy and has written, studied and lectured extensively on the subject for nearly four decades. He studied at Delhi University, Jawaharlal Nehru University (JNU) and Princeton University, USA. Black Economy India Arun Kumar Pdf To Word 11 04 How not to tackle the black economy in India Arun Kumar February 25, 2011 22:37 IST Updated: February 27, 2011 23:39 IST Share Article.

Arun Kumar’s very readable book on India’s black economy also explains why demonetization was a blunder

Black Economy India Arun Kumar Pdf Book

In the only such book on the subject, written especially for the general reader, Arun Kumar critically examines the causes and consequences of black income. Oct 4, 1999 - The Black Economy Arun Kumar Penguin Price: Rs 250, Pages: 314. The author starts by defining his underlying biases, so let's place them on.

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.

Vadivelu comedy youtube. • 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.

• 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.

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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.

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.

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Read more: Demonetisation: Counting the cost of an economic risk

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.

First Published: Feb 03, 2017 22:27 IST

Field Theory Notes By Arun Kumar Pdf Download

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The Black Economy in India Paperback – 2002 by Arun Kumar (Author).

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 millions of Indians. It has crippled the country’s economy for a long time to come.

Nissin 340t flash manuals. In this book, Arun Kumar, the country’s leading authority on the black economy, tells us why Modi’s gambit faile 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 millions of Indians. It has crippled the country’s economy for a long time to come. In this book, Arun Kumar, the country’s leading authority on the black economy, tells us why Modi’s gambit failed. He shows us the way in which the problem can be rooted out, provided the government has the political will and determination to act. Today, the black economy is estimated to be 62 per cent of GDP—or about `93 lakh crore ($1.4 trillion).

Corrupt businessmen, corrupt politicians, and corrupt members of the executive (bureaucrats, police and the judiciary) are responsible for controlling the black economy and enabling its growth. If the black economy were to be dismantled and turned into a part of the ‘white’ economy, the country’s rate of growth would be 12 per cent. If it had not grown the way it has since the 1970s, India’s per capita income today would be approximately `7 lakh per annum ($11,000) and India would become the second largest economy in the world. If the black economy were taxed at current rates, it would generate `37 lakh crore in additional taxes and the union budget would show a surplus of `31 lakh crore instead of a deficit. The failure of successive governments to tackle the problem effectively has been the single biggest obstacle to eradicating poverty. It is the cause of both widespread policy failure and the inability of the nation to improve its living conditions rapidly.

This felt like a long blog or magazine article - a long Caravan (Indian news magazine) cover story. Have read a few 200 page large-font books lately, but this one is even half of those at 100 pages. Or maybe it will feel like a poor cousin of Gurcharan Das's books (loved his on a similar theme). Bangla keybord and word download nokia e72-1. The author talks of the origins, growth, functioning and remedies of black money and black economy. He also takes a brief look at PM Modi's demonetisation. Inevitably, bcoz of its len This felt like a long blog or magazine article - a long Caravan (Indian news magazine) cover story. Have read a few 200 page large-font books lately, but this one is even half of those at 100 pages.