NEW DELHI: Union Finance Minister Arun Jaitley on Thursday sought to mitigate the fallout from the RBI’s disclosure that 99.3 per cent of demonetised notes had been returned, stating that the larger purpose of the shock measure had been to increase the taxpayer base. Jaitley pointed out that the invalidation of non-deposited currency was not the only objective of demonetisation.
“The larger purpose of demonetisation was to move India from a tax non-copliant society to a compliant society,” he said, adding, “this necessarily involved the formalisation of the economy and a blow to the black money”.
Jaitley went on to list out a series of data points from the government’s side to counter the opposition and critics who have labelled note-bandi a failure. First, the number of income tax returns filed has gone from 3.8 crore in March 2014 to 6.86 crore in 2017-18. The number of new returns filed post demonetisation have increased by 85.51 lakh and 1.07 crore in past two years, while advance tax in the first quarter of 2018-19 witnessed a rise of 44.1 per cent in personal income tax and 17.4 per cent in corporate tax category.
The Finance Minister also noted that income tax collection had increased from Rs 6.38 lakh crore in 2013-14 to Rs 10.02 lakh crore in 2017-18.
“This is the positive impact of the demonetisation. More formalisation of the economy, more money in the system, higher tax revenue, higher expenditure, higher growth after the first two quarters,” he said.
According to the RBI’s annual report released on Wednesday, banks received Rs 15.31 lakh crore or 99.3 per cent of the Rs 15.41 lakh crore worth of Rs 500 and Rs1,000 notes that were in circulation on November 8, 2016 — the day when the note ban was announced.
The remaining Rs10,720 crore of junked notes that have not returned to the system are a far cry from initial estimates which pegged the number at around `3 lakh crore. Critics also point out that this Rs10,720 crore has to be set against the extra printing cost of new notes, and notes still undeposited by holders in Nepal, Bhutan etc.Rs