In what may provide the Opposition parties with some more ammunition to attack Modi government, Union Budget 2017 is silent on the amount of Black money recovered until now after demonetisation. In his Budget speech, Finance Minister Arun Jaitley said one of the main priorities of his government is to eliminate “black money” component from the Indian economy. This was also one of the justifications used by Modi government to launch demonetisation programme in the country.
Jaitley also made it apparent that government’s primary intention, for now, is not to count the amount of black money unearthed till now, but to “change the colour of the money”. For this, Jaitley said, “We are committed to make our taxation rates more reasonable, our tax administration more fair and expand the tax base in the country.”
Since May 2014, Modi government has taken a number of initiatives to wage a war against black money menace. Demonetisation, according to the government, was the biggest such initiative. In Jaitley’s words, Demonetisation is one of the two “tectonic” policies undertaken by his government to make Indian economy more transparent and inclusive. The second is Goods and Services Tax (GST), which is expected to be rolled out soon.
Budget’s silence on the amount of recovered black money could provide the opposition with an opportunity to go on another chest-thumping spree as they have always claimed that the government is clueless about the amount of black money recovered or in circulation in the country and its strategy to tackle the menace is also doubtful.
Notwithstanding Opposition’s claims, the government is single-mindedly pursuing its agenda of a “clean” economy. It believes that pushing digital, cashless transactions is the best way forward in its mission of changing “colour” of the Indian money. As far as the amount of recovered black money is concerned, more clarity will come after RBI comes out with a credible data. In any case, the success of demonetisation cannot be judged merely by the amount of black money recovered by banks but by its effect on the way people make transactions.