Govt Suffers Rs 58,521 Cr Tax Loss Due To Illicit Trading: Report
The central government suffered an estimated tax loss of Rs 58,521 crore due to illicit goods in five key industries of the country and the illegal market is valued at Rs 2,60,094 crore, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI).
The report also estimated that unlawful trade in the five key industries results in a total estimated legitimate employment loss of Rs 15.96 lakh.
The report titled “Illicit Markets: A Threat to Our National Interests” highlighted the impact of illicit trade in five key Indian industries — mobile phones, FMCG-household and personal goods, packaged foods, tobacco products and alcoholic beverages.
According to the report, the size of illicit markets was Rs 2,60,094 crore for the year 2019-20, with the FMCG industry — household and personal goods and packaged foods — together accounting for 3/4th of the total illicit value of goods in five key industries.
Two highly regulated and taxed industries, tobacco products and alcoholic beverages account for nearly 49 per cent of the overall tax loss to the government due to unlawful trading in these industries, the report stated.
The FMCG-packaged foods stood at Rs 17,074 crore, followed by alcoholic beverages Rs 15,262 crore, Rs 13,331 crore in tobacco products, Rs 9,995 crore in FMCG household and personal goods and Rs 2,859 crore in mobile phones.
(Source: FICCI)
The highest jobs loss of 7.94 lakh was in the FMCG packaged foods industry, followed by the tobacco industry with 3.7 lakh, the FMCG household and personal goods industry with 2.989 lakh, the alcoholic beverages industry with 0.979 lakh and the mobile phone industry has 0.35 lakh.
(Source: FICCI)
While the FMCG packaged foods industry held the highest share of the illicit market at Rs 1,42,284 crore, followed by the FMCG household and personal goods industry at Rs 55,530 crore, the alcoholic beverages industry at Rs 23,466 crore, the tobacco products industry at Rs 22,930 crore and mobile phone industry at Rs 15,884 crore. 
(Source: FICCI)
In terms of the percentage of the illicit market, the FMCG household and personal goods industry was at the top with 34.25 per cent, followed by the FMCG packaged foods industry at 25.09 per cent, the tobacco products industry at 20.04 per cent, alcoholic beverage industry at 19.87 per cent and mobile phone industry at 7.56 per cent.
Meanwhile, the report asserted that the impact of the illicit market on the economy is pervasive and significant because of the backward linkages of these industries with other sectors of the economy resulting in a multiplier effect.
