It is alleged that black money belongs to rich and powerful politicians, industrialists and stock brokers. There are many popular images of the black economy, like, it is all about bribes. Some believe that it is the result of high taxes and/or of governmental controls. Yet others consider it to be a universal phenomenon and nothing to worry about. These ideas barely skim the surface of reality about the black economy. Bribes are important but are a small part of the black economy and not even counted when measuring its size.

The black money has hit at the very roots of civilized society in India. It has adversely affected the long-term prospects of the elite groups themselves-those who have spawned it for their short-run gains. It has not even improved their immediate prospects since they also lose out in the short run. The growing black economy has led to policy failure and strengthened the well-off relative to the poor. But contradictions have forced the system to the current crisis which has forced Indian capital to yield gains to international capital.

The latter is strong enough to make Indian capital concede much more than necessary. This is especially so since national capital as the prime mover of the black economy in the last 60-years had weakened itself technologically and financially and convinced itself that the nation lacks resources. This notion that the nation is short of resources has been internalized by other sections of the society, like, the politicians. Indigenous alternatives are ruled out of hand by them and they ask where else this has been tried. As if India cannot take the lead. This loss of dynamism is the other name for poverty.

The poor in India are at the receiving end of this process either way. Marketisation, whether of the global or the indigenous variety, marginalizes the poor further. The black money has been playing this role in the Indian economy and its legitimization will worsen the situation for the poor. The black incomes are concentrated in the hands of 3 per cent of the population and worsen the income disparities. Thus, even if the black economy is a worldwide phenomenon, it can hardly be ignored, given its deleterious consequences. More and more individuals are seeking solutions outside the social framework and causing the black economy to grow.

Businessmen have formed a nexus with bureaucrats and politicians to enable them to make profits illegally. This triad shares the profit. To successfully bend rules, the vested interests need not only to subvert the politics but also the bureaucracy and the judiciary. Politics has become less and less representative and caters to the interest of the vested interests. Since power has become the route to extra economic gains, politics has become sectional with the objective of gaining power through whichever means possible.

It is not that genuine politics requires black incomes to fight elec¬tions that the triad needs to control politics for its own survival. State funding of elections will not work since politicians indulge in large-scale illegality for which legal funds cannot be used. Technical suggestions for controlling the black economy, like, demonetization, voluntary disclosure, gold bond, acquisition of under-valued property and lowering of tax rates, have failed since black economy is not purely an economic phenomenon.