Bringing Black Money Back: A Discussion on Illegal Income and the Indian Economy

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The Bharatiya Janata Party’s victory in 2014 was premised on an anti-corruption development narrative, a key feature of which was a promise to bring back black money stored abroad. The demonetisation exercise in 2017 was supposed to achieve this, but given that it was ill-conceived: over 99% of the demonetised currency was returned to the system. If illegal funds are to be brought back into the economy, the government first needs to know how much black money there is.

Dev Kar’s 2011 article is a statistical analysis of black money flows in and out of India between 1948 and 2008. Kar estimates that during this period, the total amount of illicit income being moved out of the country was as high as $462 billion, and argues that sound macroeconomic policy is needed to stem the flow of illicit funds out of India. 

Arun Kumar responds to Kar, and while acknowledging the significance of his paper, contends that there are certain methodological flaws in his study. Kar responds to Kumar, and argues that Kumar needs to rethink the scope of India’s black economy.


A few other works that are broadly related to this discussion:

  1. A Post-Keynesian Approach to Understanding the Black Economy, Alex M Thomas, 2019
  2. Bringing Money Back, Suranjali Tandon, 2017
  3. Lebenslüge of Money Laundering, Avinash Persaud, 2019 


Ed: To contribute to a more comprehensive discussion map, please share links to other relevant articles in the comments section or write to us at with the subject line “Black Money and the Indian Economy.”


Curated by Kieran Lobo []


Image Courtesy: Modified. Pixabay/Rupixen/Pixabay License

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