Explanation

Black money refers to income earned through illegitimate channels or legitimate income that is concealed from tax authorities.

While black money leads to real estate speculation, luxury hoarding, and political corruption, the most severe, systemic, and direct macroeconomic concern for the Union and State governments is the loss of revenue to the State Exchequer due to tax evasion.

Tax evasion shrinks the tax-to-GDP ratio, constrains government fiscal headroom, limits capital outlays for public infrastructure, and impairs the state’s capacity to fund essential social welfare programs.

Hence, the correct option is Option D.