In response to the December 7 front page report “Expect all demonetised money to come back to system: Revenue Secy”, Dr Hasmukh Adhia, Revenue Secretary, Ministry of Finance, said:
It is very strange that only Indian Express has reported this statement in the headlines while no other newspersons who were present there have reported this.
I would like to emphasise that I did not make any such prediction that the Government expects all demonitised money to come back to the system. The question asked was that ‘what happens if all the money is coming back to the banks’. In response, I said that ‘merely bringing money to banking channels does not make it white until tax is paid on the same’. I, therefore, mentioned that even if all the old money comes to the banking channels, Income Tax Department would be able to see the trail of money coming from various individuals and we would be able to recover tax on the same along with penalty, wherever applicable.
While all other newspapers, including PTI, have reported this as the main substance of my reply, only Indian Express seems to have drawn a different conclusion of this reply and has put this in form of a headline as if the Government has already concluded that the entire money is going to come back. I may like to point out that it is not possible for me to make such a prediction and there is no reason why I should make such prediction prematurely.
Our Correspondent replies:
The report was based on Revenue Secretary Hasmukh Adhia’s response to a reference by a journalist to media reports that the entire demonetised money would come back to the system. Adhia told journalists on the sidelines of a conference in Mumbai: “Do you think that by simply depositing money in the bank account makes black money into white? It doesn’t. It will become white when we charge taxes, when the Income Tax department can reach up to them by issuing a notice and questioning them… The expectation is that the entire money which is in circulation has to come to the banking channel so that we can trace the transactions and trace the entire money, who does it belong to and has tax been paid on it. This being the idea, some money has come back in the banking system and we still have time to go.” This quote was accurately reproduced in the news report. Adhia had also said, “We can only know the final position when the scheme closes on December 30.”