Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India? ​

Black money is income that escapes tax and is kept outside the formal books. Its most direct damage is to the State's finances, which is why option D is correct.

Tax evasion means the government collects less than it is due, so less money is available for health, education, infrastructure and subsidies, and the fiscal deficit widens. This is the core worry behind the government's anti-black money measures, from the SIT report of 2015 to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

• A and B describe how black money is spent. They matter for asset prices and economic efficiency, but they are consequences, not the primary fiscal concern.
• C is a real concern under electoral funding, but regionalism is not a standard effect the government identifies. It is a weak link.

Mains angle: black money and the parallel economy, linked to GS-3 economy and to electoral reforms in GS-2.

Trap: choosing the option that sounds most vivid, such as gold or real estate. Prelims asks for the effect the government identifies as the main worry, which is revenue loss.