On the first anniversary of the controversial demonetisation move by the Narendra Modi government, Chief Minister Devendra Fadnavis Wednesday defended the move saying, “Along with GST, it brought the entire money from informal to formal economy and took India on the path of becoming a more tax compliant society.” Addressing a press conference here to mark one year of demonetisation, he cited “digital transactions worth about Rs 6.6 lakh crore” as the “greatest achievement of demonetisation, since it took the country on the path of less-cash economy”.
Reeling out statistics, Fadnavis said, “Now that the entire currency is back in the RBI coffers, it will become known as to who had done suspicious transactions and the Income Tax department is checking transactions worth over Rs 2.69 lakh crore. It will now become known as to which money was black and which was white.”
He compared the performances of the former and current PMs saying, “Despite being a globally-known economist, Manmohan Singh brought Indian economy into worst disrepute, while, despite not being an economist, Modi earned India a reputation of being the fastest growing economy in the world.”
He further said, “Over 56 lakh new taxpayers have come into the income tax net. In the advance tax section, there has been a hike of 42 per cent.” He added, “Together, direct and indirect taxpayers’ number has gone up from 3 crore to 6.3 crore, making India a more tax compliant society.”
As against the view expressed by many leading economists that shell companies could have been cracked down upon even without demonetisation, Fadnavis attributed it to demonetisation. “The government has deregistered 2.24 of 2.97 lakh such companies,” he said. Fadnavis claimed that there has been a massive surge in investments through public issues and mutual funds in post-demonetisation period.
On the issue of traders’ “negative sentiment” in the post-demonetisation and GST rollout period, he said, “There is no negative sentiment. There were going to be some problems in post-GST rollout but now the market sentiment is that demand and sales have gone up hugely.” He attributed the post-GST slump in growth rate of economy to clearance of existing stocks and stoppage of production by industries.
“Now, with demand and sales going up, it is again shooting up,” he said.
Fadnavis also cited as the government’s success, a chain of decisions including treaties with various countries to plug passage to foreign tax havens to convert informal economy to formal. Asked why the Modi government didn’t expose those who have taken the global tax havens’ route to evade taxes, he said, “Some treaties don’t allow naming of the persons. But the list we have submitted to the Supreme Court has many more names.”