Black money has pernicious impact on Indian economy, says President Pranab Mukherjee

President Pranab Mukherjee said that unaccounted money on which tax is not paid has a pernicious impact on economy.

Illegal deposits abroad costs billions of dollars in lost revenue and Prime Minister Narendra Modi had promised his government would change laws or enact new measures to bring back such funds. On taking office, he appointed a panel to investigate the matter.

"The number of persons who are probably within the tax net don't reflect the actual number. That is one of the reasons why unaccounted money what is being called as black money, on which nowadays people are talking too much, that is being generated in the economy and has it pernicious impact on it," said Pranab Mukherjee.

While there is no official estimate of the amount of money illegally deposited abroad, Washington-based think-tank Global Financial Integrity has estimated India suffered  $344 billion in illicit fund outflows between 2002 and 2011.

President Pranab Mukherjee said nexus between black money, militancy and drug trafficking posed a great threat to global peace. "One phrase has been used in course of discussions- narcotic terrorism. There is close nexus between drug trafficking, arms smuggling, creating unaccounted money, financing terrorism and this vicious nexus are posing a serious threat to the peace and tranquility of the whole world," added the President.

In Australia, Prime Minister Narendra Modi had said repatriation of unaccounted money was his government's top priority and sought close coordination among the BRICS countries and G-20 member nations.