The Professor of Black

We’ve spent so much time over the past year discussing black money, you’d think there would be no shock figures left.

You’d be wrong.

Virtually everything ‘The Professor of Black’ Arun Kumar said in an intimate conversation at Algebra was a revelation.

Don’t have time to watch the full session? Here’s 5 key contentions or takeaways from the professor, arguably India’s foremost expert on the subject:

1. That the total size of the black economy in India is approx. Rs 90 lakh crore, which is about 62% of GDP.

2. That many big black money ‘sectors’ like real estate are not really creators but circulators of black money.

3. That black income is created through conscious inefficiencies or corruption – in businesses, for instance, by understating revenues and overstating costs – and is not limited to any sector.

4. That less than 0.5% of the black economy goes toward election funding.

5. That if India’s black economy had been checked, we should have been an approx $15 trillion economy, and growing at about 12%.

He also touched on the behavioural and societal failures that enable and sustain the black economy, the political machinations that make dismantling it all but impossible and the necessity of people’s movements – the only true citizen power in a democracy – to push governments to act in ways that deter the parallel economy.

No matter which side of the demonetisation debate you found youself on, this session is a must if you’d like to understand black money better. And while you’re at it, we’d recommend ordering a copy of Prof Kumar’s most recent book, Understanding the Black Economy: a racy, informative read that deep-dives into the opaque, invisible world of money.

Watch the full session above.