Black money is the money that is earned, saved and invested through illegal ways. This black money impacts the economy in a negative way because there is no check and balance over it and sometimes law enforcement agencies fail to track down this money in the result of which many successful criminal activities take place, for example, terrorist attacks. In any country, it is important that proper law enforcement should be implemented to control the crime rate and it is not impossible for a state to completely get rid of the crimes that exist in a society.
IMPORTANCE OF LAW ENFORCEMENT ON BLACK MONEY:
Mostly, law enforcement agencies take care of all the illegal activities that can harm the country. Black marketing is one of them. The greatest impact of black money is on the economy and the consequences can influence the social structure as well. It is important that the state should establish such strong mechanisms in the form of law enforcement agencies so that innocent people will not have to face the problems created by illegal money. For example, people holding black money d not give taxes because it is not counted as the money that is in the economy. Basically, tax evasion takes place. Due to low tax revenues, other people have to pay higher taxes. This is why law enforcement agencies are important because they can save innocent people from bearing the burden.