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UPSC PYQPrelims 2021

Civil Services Examination · Question 9

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?

  1. Diversion of resources to the purchase of real estate and investment in luxury housing
  2. Investment in unproductive activities and purchase of precious stones, jewellery, gold, etc.
  3. Large donations to political parties and growth of regionalism
  4. Loss of revenue to the State Exchequer due to tax evasion
Show answer & explanation

Answer: (D) Loss of revenue to the State Exchequer due to tax evasion

Explanation

The principal concern with black money is tax evasion and the resulting revenue loss to the exchequer.