Finance Minister Arun Jaitley has slapped a series of figures and data on the faces of the critics of demonetisation. With Opposition crying foul on how the Narendra Modi government’s demonetisation drive has derailed the Indian economy, a set of 5 data points presented by the Finance Minister come as a fitting reply. As Jaitley himself says, “Assessments can be unreal, but revenue is real”. Addressing the media, FM Jaitley today said, “Of course there would be areas that would also be adversely impacted but what was being predicted by the critics has to have a rationale with the revenue collections.” According to Jaitley, “with the critical part of the remonetisation already behind us, and there being no significant impact in a large number if these areas, it should certainly be much better in the weeks and months to come than it was in the last 6 weeks.” Here are 5 notable things he said:
1) Already a large part of the benefits of this historic move are visible. A lot more money has come into the banking system. Cash has an anonymity attached to it, what comes into the banking system gets identified with a person and therefore its impact on taxation and revenue collection is already being seen. The ability of the banks to lend has now increased.
The revenue figures itself are more significant. We have till the 19th of December, the direct tax figures of income tax, which are now available. And the net increase in the income tax so far, has been to the extent of 14.4%. And if one factors in very large quantums of refunds, because these days the refunds are also made immediately, the net increase is still 13.6% till 19th of December.
Watch: Here’s what FM Arun Jaitley said to critics of demonetisation
2) The indirect tax figures are also available. And not withstanding what the critics have predicted, in all the categories till 30th of November, there is a very significant increase in indirect taxation. In the central indirect taxes the increase is 26.2%. This is till the 30th of November. And this includes excise duties increasing by 43.5%, service tax increasing by 25.7%, and customs duties by 5.6%.
3) We have also tried to check up the figures for the month of November, which could have been adversely impacted on account of the currency replacement. Compared to the November of 2015, on a year-to-year basis, the November of 2016 – for all the three indirect taxes, the collection is much higher. We have also been trying to look at the figures of the state governments for the actual month of November which would be reported by the state governments only towards the end of December, the increase or decrease is not very significant, and in several areas which could have been impacted because of the move.
4) In the field of agriculture, because we were also concerned that it should not cause any distress in the rural areas, the rabi sowing – overall for all crops – is 6.3% higher than last year.
5) Life insurance businesses have increased, international tourism has increased, air passenger traffic has increased, petroleum consumption has increased. The flow into the mutual funds has increased by 11%.
Jaitley also went on to assure the common man that there is no dearth of currency in the system. “The Reserve Bank has very large amounts of currency available and it will continue to support the market to the extent that the market needs that kind of liquidity. Amongst the currency which was in circulation on the 8th of November, a very large part has already been replaced and would continue to be replaced to the extent that the market requires that currency,” he said. “More and more notes of Rs 500 are being released into the market through the banking and the post office system and therefore we can now see a lot more currency coming into recirculation which is enabling the banking system and the ATMs to further augment the supply itself,” he added.