ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Estimation of the Size of the Black Economy in India, 1996-2012

This article attempts to make an advance in the estimation of the size of the black economy in India by bringing in the institutional aspects of black income generation and taking the macroeconomic variables they affect into consideration. The fiscal approach recognises that black incomes are generated through many different ways in various sectors. The size of the black economy is projected on the basis of the share of the services sector and trade in gross domestic product, with the crime rate representing the extent of illegality.

Earlier drafts of this article were presented at the Conference on Black Economy at JNU in December 2013 and June 2015. I am grateful to the participants for their comments. I place on record my thanks to Saumen Chattopadhyay, JNU, for detailed comments on the article, and to Rohin Anhal, South Asian University, for discussions on the technical aspects. I also thank Meghna Sharma and Naman Mishra for assistance in the data work. I express my gratitude for the funding received from the Norway government via SNF, Bergen for the Tax Haven Project, and JNU for the Sukhamoy Chakravarty Chair. I alone am responsible for errors that remain.

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