BANKING AFFAIRS

Detailed explanation-1: -Parallel economy emerges due to tax evasion. Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts. It involves taxpayers intentionally manipulating the true state of their affairs to the tax authorities to reduce their tax liability.

Detailed explanation-2: -Parallel economy exists due to various reasons High inflation which puts taxpayers under high tax-paying brackets. People do not get enough return on their paid taxes. Involvement of government agencies and officials in corrupt practices.

Detailed explanation-3: -Parallel Economy also known as unsanctioned sector, illegitimate sector, unaccounted economy and much more; is an economy where it is about promoting economic activities where conspicuous consumption and corruption are the typical spending pattern.

Detailed explanation-4: -Parallel Economic Model (PEM) is a theoretical dual economy model meant for use used within a State or Province of a larger nation-state.

Detailed explanation-5: -The black economy or parallel economy consists of all the activities in which black incomes are generated and black incomes are factor incomes, property incomes, not reported to direct tax authorities.