UPSC CSE Prelims
Question 80
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?
View correct answer and explanation
Correct answer: D
Correct Option: D (Loss of revenue to the State Exchequer due to tax evasion)
Explanation: Black money hidden from tax authorities erodes tax collections and damages public finances; other distortions exist, but revenue loss is the central government concern identified.
Option-wise Analysis:
A. Incorrect-Property speculation is a harmful use, but not the defining fiscal problem.
B. Incorrect-Unproductive purchases misallocate capital but are not the primary exchequer issue.
C. Incorrect-Political donations may cause corruption, but the question focuses on the direct financial impact.
D. Correct-tax evasion deprives the State Exchequer of revenue.