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 activities and purchase of precious stones, jewellery, gold, etc.
(c) Large donations to political parties and growth of regionalism to the State
(d) Loss of revenue Exchequer due to tax evasion
Answer:
D
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Explanation:
The creation of black money in India has been a major concern for the government due to its impact on the revenue collection. Black money refers to income or wealth that is not disclosed to the government for tax purposes. When individuals and entities engage in tax evasion, it leads to a loss of tax revenue for the government, which can hinder the government's ability to fund public services and development initiatives. Therefore, the loss of revenue Exchequer due to tax evasion is a significant worry for the government.