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33% of the annual gross domestic product (GDP) at market value is the amount of black money in the black economy of Bangladesh
The amount of black money in the country is estimated to have exceeded Tk10 lakh crore in the last 2020-21 fiscal year (FY).
This calculation has been made on the basis of the formula given by several domstic and foreign economists at different times that the size of the black economy of Bangladesh is one-third of the formal economy.
According to Professor Abul Barkat, president of Bangladesh Economic Association (BEA), 33% of the annual gross domestic product (GDP) at market value is the amount of black money in the black economy of Bangladesh.
Bangladesh Bureau of Statistics (BBS) estimates the market value of GDP in the FY2020-21 stands at Tk30.12 lakh crore.
The value of 33.3% of it stands at Tk10.03 lakh crore.
In its previous year 2019-20 fiscal year, the market value of GDP was Tk27.4 lakh crore. As a result, the amount of black money in the country that year was Tk9.12 lakh crore.
Professor Barkat also shed light on various topics as well as black money in his book titled “In Search of a Transition from the Virus-Driven Great Disaster to a Decent Bangladesh: On the Larger Canvas of Society-Economy-State.”
In the book published this year, he gave a detailed table of the amount of black money at 20%, 25%, 30% and 33% of the market value based on his research and analysis on black money at different times.
It gives an estimated amount of black money for the FY1972-73 to FY2018-19, for the 48 years. Based on that, the amount of black money for the FY2019-20 and FY2020-21 has been calculated.
According to Investopedia, black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes.
According to Abul Barkat, “Black economic activities are those transactions which are not legal according to the prevailing rules of the country. The transactions of the black economy are unregulated. They are not taxable and the transactions of the black economy are not measured because those transactions are not recorded.”
Economists also call it the shadow economy, the hidden economy, the parallel economy, and the informal economy.
Earlier in 2017, Friedrich Schneider and Leandro Medina prepared a working paper for the International Monetary Fund (IMF), where they illustrated an account of the shadow economies of 158 countries from 1991 to 2015.
In 2019, the two economists updated their work data. It shows that the average rate of black money in Bangladesh is 33.1% of the market value of GDP.
(DT)
