This refers to Sunanda K Datta-Ray's column "Black money and black holes" (Where Money Talks, November 1). The author is linking black money generation and its exit from the country to the difficulties in investing in India. Black money generated by businesses and sent out mostly makes a comeback through round-tripping. This won't happen if investors didn't find it worthwhile to invest in India. The fundamental reason for black money generation is human greed on one hand and the lack of preventive measures on the other. That is why even though tax rates are moderate and more or less in line with global rates, black money continues to be generated. The other aspect is, of course, the fact that politics in India is funded by black money.
So black money gets generated through bribes and is parked abroad for some time, till it is brought back for elections and other such political expenses. All in all, little black money will be remaining stagnant in accounts abroad and must be coming back in circulation in the country. One effective solution for the black money problem will be to make political funding transparent.
Kishor Kulkarni Mumbai
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