Question

Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

(a) Diversion of resources to the purchase of real estate and investment in luxury housing

(b) Investment in unproductive activities and purchase of precious stones, jewellery, gold etc.

(c) Large donations to political parties and growth of regionalism

(d) Loss of revenue to the State Exchequer due to tax evasion

Answer 1

(d) Loss of revenue to the State Exchequer due to tax evasion

Black Money/ Tax Evasion reduces the revenue collection/fiscal resources of the government for running the welfare schemes. This problem has been highlighted multiple times by the economic surveys.