Who Creates Black Money?

Shantha Kumar
3 min readApr 30, 2021


Illogical taxes create Black Money!

In all those thousands of companies across the world, I think, the pattern followed is almost always the same.

Let me just recount how it happens in my company! Nothing new here!

We have a bonus which is dispensed once every year based on performance of the person. If the person brings up a good performance for the year, then obviously he will get a bonus; a good one if his performance was excellent.

Every person is set a target at the beginning of the year. The target set at the start of the year for me was Rupees one hundred million worth of sales. At the end of the year, I had crossed that and reached up to one hundred and twenty million rupees worth of sales!

The company rewards people like me who bring more money to the kitty. Naturally, I got a good bonus which was a share in the total earnings that happened through me!

Now, instead, just imagine, if the company were to set a target and if I cross the target, then I will be penalised by a percentage of the amount by which I exceed the target, then will I ever cross the target?

Penalty for achieving and earning more money for the company is normally encouraged. But if a company penalises you for achieving more or for earning more, what can you say about that company?

I am not talking about some company. I am talking about our country, India. For that matter, most of the countries across the world!

India wants to be richer. Yes, of course!

India can be richer only if people like you and me, make more money. That is, we should produce more. And so, if I produce more and if the country wants me to produce more, what should they do? Encourage me or discourage me?

You will say, encourage. Government also says the same to everyone. But what they say is NOT what they do!

The income tax is a penalty for earning MORE! When you earn less, you pay no ‘penalty’ or tax. When your earnings go up, the tax percentage steadily goes up to reach 35% all inclusive.

That is to say, every time you work hard and produce more revenue for the country and for its people, you end up paying more ‘penalty’ / tax! A ‘punishment’ for earning more or producing more.

But then people want to make more money. The society wants you to make more money. You cannot stop that!

What happens then?

When government makes a rule that is against the social need, however much the government might try, those rules and laws will NOT be followed. Government will only find itself trying very hard to implement these laws and in a high-handed way!

Naturally, people will certainly try and make more money. But if that is known to the government, they will penalise. Therefore, they will keep it out of the knowledge of the government. And what is the result?

Black Money!!

So, who creates black money? Government or the people?

When wrong rules are made, people will not follow it, even if you are a dictator. You will only create rule breakers.

In this case, you end up creating more black money and then, corruption as an offshoot of this.

To know that the government should encourage a person who earns more and not discourage him, is not rocket science. Even a roadside vendor will deduce this much. That if the country wants to become rich, then they should encourage people who make more money.

It is common-sense!



Shantha Kumar

Electrical engineer with over 40 years of experience in the field. Currently head the operations of eClouds Energy LLP. Power sale, energy audit are interests