The "shadow economy" in India will shrink to 13.6% of the GDP by 2025, a study by Association of Chartered Certified Accountants (ACCA) said. Shadow economy refers to the production of and trade in goods and services that are deliberately and often illegally concealed from public authorities.
The report, titled 'Emerging from the shadows: The shadow economy to 2025', said the shadow economy in India currently represents 17.22% of GDP, totalling about Rs 26,15,800 crore in 2016.
"This will fall to 13.6% of GDP by 2025. The global average is expected to fall from 22.5% to 21.39% of GDP over the same period," it noted. The prevalence of shadow economy activity throws up considerable practical and ethical issues for both business and government, Sajid Khan, Head of International Development at ACCA, said.
"The fall in the shadow economy is being driven by the increasing health of the overall economy, such as rising employment and GDP growth," he added. He cautioned that this "success" should not encourage a culture of complacency.
"The overall rate of unemployment will (be) a significant driver of the shadow economy, as people struggle to access legal, regulated work. In addition there will be challenges created by the rise of new technologies, such as Bitcoin," he said.