As Thursday marked the second anniversary of demonetisation, the government put up a staunch defence of the exercise, highlighting how it put a leash on unbridled cash in circulation, improved the taxpayer base and spurred formalisation of the economy. The Opposition, however, termed the note ban a gargantuan policy misadventure that dented economic growth, rendered millions jobless, hit MSMEs badly and contributed to the current liquidity crisis among non-banking financial companies (NBFCs) and infrastructure lenders. A finance ministry functionary tweeted that without demonetisation, currency in circulation in June 2018 would have been higher by Rs 3.47 lakh crore. The CIC stood at `19.6 lakh crore on October 26. Asserting that demonetisation wasn\u2019t a currency confiscation exercise (with 99.3% of total junked notes worth Rs15.41 lakh crore back, the Opposition had mocked the government\u2019s plan to reap a windfall of Rs 3-4 lakh crore\u2019 due to extinguished currency notes), finance minister Arun Jaitley said the number of tax returns filers will be doubled in the five years of the current NDA regime from 3.8 crore in May 2014 (see chart). Removing the Rs 500 and Rs 1,000 currency notes in November 2016 resulted in \u201cmore formalisation (of the economy), more revenue, more resources for the poor, better infrastructure, and a better quality of life for our citizens\u201d, Jaitley insisted. Former Prime Minister Manmohan Singh, however, pointed at the struggle of small and medium enterprises, which create jobs, to tide over the note ban shocks. \u201cWith a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now. It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets,\u201d Singh said. Former finance minister P Chidambaram said demonetisation did not end the use of black money. \u201cDemonetisation did not put an end to fake currency. On the contrary, counterfeiters have successfully counterfeited new `2,000 and Rs 500 notes,\u201d Chidambaram said. Jaitley, however, sought to counter the claims of ill-effects of the note ban exercise. \u201cGetting it into the formal economy and making the holders pay tax was the broader objective. The system required to be shaken in order to make India move from cash to digital transactions. This would obviously have an impact on higher tax revenue and a higher tax base,\u201d Jaitley said. He said in 2017-18, the tax returns filed reached 6.86 crore, an increase of 25% over the previous year. As of October 31, already 5.99 crore returns have been filed, up 54.3% from a year before. Even though it is undeniable that the tax base expanded at a much faster pace immediately after demonetisation (the pace has since seen some deceleration but GST imparted some momentum again), the revenue growth hasn\u2019t exactly kept pace. As FE reported earlier, 21 months after the launch of Operation Clean Money to find out how much of the demonetised currency that returned to the banking system during the November 9-December 2016 window is tax-compliant, the government has no centralised data yet on prosecutions launched against persons identified for suspicious cash deposits. While direct tax collections increased 6.6% and 9%, respectively, in two years before the note ban, the rise has been as much as 14.6% for 2016-17 (when note ban took place) and 2017-18 put together, Jaitley noted. In the last fiscal alone, there was an increase of 18%. As many as 86.35 lakh new tax filers were added this year. Even the indirect tax-to-GDP ratio has risen to 5.4% post-GST, against 4.4% in 2014-15. Jaitley said the share of indigenously developed payment system of unified payments interface (UPI) and RuPay card have touched 65% of the payments done through debit and credit cards. Separately, economic affairs secretary Subhash Chandra Garg said demonetisation and GST reflected the government\u2019s long-term vision and its ability to undertake massive structural reforms. The UPI transactions, launched in 2016, have grown from Rs 50 crore in October 2016 to Rs 59,800 crore in September 2018. As many as 1.25 crore people are using the BHIM App for quick payment transactions and the value of such transactions has gone up from Rs 2 crore in September 2016 to `70,600 crore in September 2018. The RuPay card, used both at the point of sale (PoS) and for e-commerce. The RuPay card transactions for point of sale (PoS) have increased from `800 crore before demonitisation to `57,300 crore in September 2018; similarly, for e-commerce, the Rupay card transactions went up from just Rs 300 crore to Rs 2,700 crore.