Countering Opposition attack that the note ban exercise failed to meet its objectives, Finance Minister Arun Jaitley on Thursday said despite nearly all demonetised notes returning to the banking system, the move resulted in more formalisation of economy, higher tax revenue and higher economic growth.
“Was the invalidation of the non-deposited currency the only object of demonetisation? Certainly not. The larger purpose of demonetisation was to move India from a tax non-compliant society to a compliant society,” Jaitley said in a Facebook post.
On Wednesday, the RBI said it had received Rs 15.31 lakh crore of Rs 500 and Rs 1,000 notes, or 99.3 per cent of the Rs 15.417 lakh crore worth of notes that were in circulation as on November 8, 2016, when the government announced demonetisation. The report left Opposition parties wondering where had the black money gone.
Dishing out statistics in favour of the exercise, Jaitley said post-demonetisation about 1.8 million people had been identified whose deposits were not in consonance with their income. “Many of them are being fastened with tax and penalties. Mere deposit of cash in a bank does not lead to a presumption that it is tax paid money,” Jaitley, who resumed his duties as Finance Minister last week, said.
The Finance Minister also said in the last two years, filing of Income Tax returns had increased by 19 per cent and 25 per cent respectively. “In March 2014, the number of Income Tax returns filed was 3.8 crores. In 2017-18, this figure has grown to 6.86 crores. The number of new returns filed post-demonetisation increased in the past two years by 85.51 lakhs and 1.07 crores,” Jaitley said.
In monetery terms, Income Tax collections have increased from Rs 6.38 lakh crores in 2013-14 to Rs 10.02 lakh crores in 2017-18. “The growth of Income Tax collections in the two years preceding demonetisation was 6.6 per cent and 9 per cent. Post-demonetisation, the collections increased by 15 per cent and 18 per cent in the next two years,” the Union Minister said.
Besides demonetisation, the Opposition has also faulted the government over hasty implemention of Goods and Services Tax (GST), calling both the policies a “surgical strike” on the economy. “GST was implemented from July 1, 2017 i.e. post demonetisation. In the very first year, the number of registered assesses has increased by 72.5 per cent. The original 66.17 lakh assesses has increased to 114.17 lakhs,” he said.