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Arun Jaitley after Congress slams RBI report: Some do not understand demonetisation

"Object of demonetisation was not confiscation of money. Object of demonetisation was that India is predominantly high cash economy therefore that scenario requires to be significantly altered," said Jaitley.

By: Express Web Desk | New Delhi | Updated: August 30, 2017 8:46 pm
demonetisation, arun jaitley, rbi, reserve bank of india, demonetisation, rbi report, rbi annual report Finance Minister Arun Jaitley on Wednesday hit back at the Congress for lashing out at the Reserve Bank of India for note ban saying those criticising demonetisation do not understand it.

Finance Minister Arun Jaitley on Wednesday hit back at the Congress for lashing out at the Reserve Bank of India for note ban saying those criticising demonetisation do not understand it. “Object of demonetisation was not confiscation of money. Object of demonetisation was that India is predominantly high cash economy therefore that scenario requires to be significantly altered,” said Jaitley in a press conference after the RBI released its annual report on the demonetised notes.

According to the RBI annual report, 99 percent of the demonetised notes have returned back in the system. Jaitley added that demonetisation was not just to weed out black money but also to bring people into the banking system and put and end to terror funding. “Objective of note ban was to bring down cash in economy, bring digitisation, expand tax base and fight black money. People with inadequate understanding of how to tackle black money linked note ban with money returned to system,” said Jaitley.

The finance minister added that the government will next try to check black money used in elections. “My next step is going to be to put an end to black money used in elections,” said Jaitley.

Earlier, reacting to the RBI report, former finance minister P Chidambaram lashed out at the reserve bank saying the decision to demonetise Rs 500 and Rs 1000 notes did not give the desired result. He also questioned the Narendra Modi government whether its demonetisation decision was designed to convert black money into white.

“99% notes legally exchanged! Was demonetisation a scheme designed to convert black money into white?,” Chidambaram said on Twitter. He also said that the economists behind the demonetisation move “deserve Nobel prize” as the RBI gained Rs 16,000 crore, but lost Rs 21,000 crore in printing new notes. “Rs 16000 cr out of demonetised notes of Rs 1544,000 cr did not come back to RBI. That is 1%. Shame on RBI which ‘recommended’ demonetisation.

 

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    Lucian DSilva
    Sep 2, 2017 at 5:33 pm
    Unbelievable "India being High cash economy" so with which country FM is comparing us ? In absence of comparison what does such statement implies ? If we ask the reason for High Cash economy, fingers will raise to the previous Govt. DeMo result are open, untold hardship citizen underwent, at cost of many lives - is human lives above money for the present rulers. Each and every family suffered extra burden to the tune of average Rs.2000/- that equals to X 40 crores 80,000 crores public personal money loss on fares, time, search for cash exchanger, cash and now searching for change of Rs.2000/- notes. Economy is already down and with imposing various religious related bans the economy will further worsen. One essential commodity i.e. milk price will double in 1 or two month time.
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    1. Narasimha Prakash
      Aug 31, 2017 at 3:50 pm
      Whatever was the objectives, I do not really care. But today the government is sitting with a vast amount of data which enables them to go behind all those who were either under stating their incomes or totally not paying any tax at all. Already there is an increase of 25 more number of people who have filed their income tax returns as compared to last year. Till August advance tax collection has gone up by 42 . The IT department has issued notices to tens and thousands of people who will come on line. The opposition can keep on barking and Chiddu can keep making statements. What did he do to increase the tax base ?? Let Chiddu take care of his son who is involved in scams and avoiding meeting the CBI and Enforcement Directorate.
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      1. Narasimha Prakash
        Aug 31, 2017 at 3:51 pm
        25 more people who have filed their income tax returns as compared to last year.
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          rishi
          Aug 31, 2017 at 4:10 pm
          you mean 25 percent more than last year.
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          1. Narasimha Prakash
            Aug 31, 2017 at 4:15 pm
            right . 25 percent and 42 percent.
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              rishi
              Aug 31, 2017 at 4:57 pm
              Very well grasped the situation in entirety. NDA is making 'sincere efforts' .....THAT certainty is enough to pull up the Nation towards a long-due financial discipline on many fronts of our economy. During UPA regime, the Nation's money was going to the congress coffers....now it is rightfully going to the government treasury....which eventually translates into greater spending by the NDA Govt. known for its well-intended honesty of purpose in public affairs and that's what uplifts the economy in multiple ways.
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                Dominic Pullen
                Aug 31, 2017 at 8:25 pm
                The 25 percent increase in IT Return stated is factually incorrect as per IT Department published data. It is the increase in e-filed Returns (from 2.27cr to 2.83cr) for the period from 1-Apr to 5-Aug compared to previous year data for the same interval. It only shows that 25 percent more people migrated to e-filing and not any increase in tax base. The total number of IT Returns for 2016-17 was 5.93cr, just 2.5 percent more than 2015-16 (5.78cr) . In fact, the increase in e-filed Returns was 22 percent even in 2016-17 compared to 2015-16.
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            2. Bonny Moraes
              Aug 31, 2017 at 1:58 pm
              Mr Jailey, I am glad that at least you understand the reason behind demonetisation. And by the way you have shifted to new reasons which I am sure are very valid. But was the shock treatment necessary?
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                Dominic Pullen
                Aug 31, 2017 at 11:33 am
                Kudos to Indians!!! They could get all the old currencies deposited within the limited time that too under stringent restrictions imposed by RBI. Very efficient population, no doubt. If the objective was only to reduce the cash supply by 17 as claimed by Jaitley now, was it necessary to demonetize 500 Rupee currency? Demonetization of 1000 Rupee currency alone would have achieved better results with lesser hardships. Also, PM could have happily given at least 1 year for depositing old currencies, as confiscation of old currencies was not at all the objective.
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                  Aadi
                  Aug 31, 2017 at 12:59 pm
                  Dumbo...The sole purpose f demonetization was not to earn for the RBI but to wipe out the illegal black moneycirculation going on widespread in real state sector, unorganised sector, hawala etc. Now after coming of the 2000 notes and made many people visit banks and open an accout wherein earlier many industries were running just on hand cash. People should have a little bit of intelligence before commenting against demonetization.
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                  rishi
                  Aug 31, 2017 at 8:12 am
                  the positive impact of demonetisation is visible in the extent of negative comments here bringing out the reality of many Indians who got conditioned to easy life of easy money and are now unable to cope with the challenges of the New-India Environment in the making with NDA's courageous endeavour towards a long-due financial-disciplining of the Nation which was grossly neglected by the earlier regime. The current Finance Minister has shown unprecedented creativity in simplifying the financial regime of the Nation aimed at honesty, transparency and 'economic productivity' of all Indians. Millions of aspiring and ambitious young and women have caught on the imagination of the Govt. and have increasingly adopted digital transactions as their chief mode of economic-life. As a result of demonetisation, the digital economy is increasingly expanding while the parallel economy is facing its due closure ......
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