Amid growing criticism of demonetisation, Prime Minister Narendra Modi has sought to explain how the “historic” note ban move has benefitted the country. RBI Annual Report 2016-17 has revealed that around 99% of the total cash in circulation before 8 November 2016 returned to the banks. However, in a post on his website narendramodi.in, PM Modi says, “Demonetisation was a historic decision taken on 8th November 2016. High denomination currency notes of Rs. 500 and Rs. 1000 were ceased to be legal tender. This led to a slew of benefits to the country. It was this decision of the government that led to India’s highest ever detection of black money, increase in tax compliance and cleansing of the financial system.”
PM Modi has shared four graphs to drive home his view of demonetisation benefits. Critics, however, continue to believe that note ban decision was an unnecessary burden thrust upon the people for political gains.
Here are some of the important points highlighted by PM Modi:
1. Highest ever Black Money detection
- Scrutiny of suspected 18 lakh accounts done
- Cash deposits worth Rs 2.89 lakh crore under investigation
- Advance data analytics tools identified 5.56 lakhs new suspect cases.
- 4,73,003 suspicious transactions detected
- Undisclosed income worth Rs 29,213 crore detected and admitted
- Black Money worth Rs 16,000 crore did not return post demonetisation
- 21% reduction in currency circulation
2. Unprecedented increase in Tax compliance:
- 56 lakh new tax payers added
- No of Returns filed increase 24.7% compared to 9.9% in previous year
- Advance tax collections of Personal Income Tax grow at 41.79% over same period of last year
- Personal Income Tax under Self Assessment Tax grow at 34.25% over same period last year
3. Cleansing India’s Financial System
- Transactions of more than 3 lakh suspected shell companies under the radar
- 2.1 lakh shell companies de-registered
- Around 450 companies delisted and 800 untraceable companies to be further delisted
- More than 400 benami transactions identified and market value of properties attached more than Rs 800 crore
4. Slew of benefits to the country
- Deposits in the banking system increased around Rs 3 lakh crore
- Additional liquidity helped reduce interest rates by 100 basis points
- Digital payments increase by 56% from 71.27 crore transactions in October 2016 to 111.45 crore transaction in May 2017
- More than 1 crore workers added to EPF and ESIC system post-demonetisation
- Bank accounts opened for about 50 lakh workers to get their wages credited directly in their accounts.
However, despite the big claims India’s GDP has dipped by 2 percentage points and informal employment sector has been badly hit.