Reserve Bank of India’s 2016-2017 annual report revealed that all but 1.4 per cent of the old Rs 1,000 notes have come back into the banking system. In its annual report for 2016–17, the RBI said that out of 632.6 crore pieces of Rs. 1,000 currency notes in circulation, 8.9 crore have not been returned post the note ban last November.
FM Jaitley today said, “Object of demonetisation is that India is high cash economy and that scenario needed to be changed, give blow to black economy. Volume of cash currency in system has come down by 17 pct. Direct tax base has increased substantially post note ban”. “It is unfortunate that those who never fought against black money, tried to confuse the object of demonetisation. Integration of the formal and informal economies was among the principle objectives of note ban”, Jaitley added.
In his statement, Jaitley made a number of points. Among them was his highlighting the gains derived by country from demonetisation exercise. FM said, “It’s obvious that direct tax base expanded substantially after demonetisation and the government is trying to sustain momentum of digital transactions.” Demonetisation also led to cash available with terror elements in Kashmir being reduced, he said.
“Object of note ban was never to confiscate cash. Next step will be to cleanse political funding”, Jaitley further revealed.
He hit out hard at critics who have said that there were no gains from demonetisation, FM said, “Some people confusing note ban with amount of money which has come back.” In his attack on critics, Jaitley also said, “People who haven’t taken a single step against black money haven’t understood aim of note ban; deposits in banks don’t legitimise it.
Among the major gains that FM Jaitley said the system has derived is that income tax returns rose over 25 percent.
Jaitley finished by saying, “With 99% of junked currency coming back into banking system, money has now been identified with its owner.”