Economy

Finance Minister Arun Jaitley Denies That Demonetisation Was Unsuccessful; States Larger Purpose Even As Rahul Gandhi Attacks. LIVE UPDATES Here

Written By Digital Desk | Mumbai | Published:

Update at 5:46 PM: PM promised of Rs 15 lakhs, jobs, Bullet train. But we don't take his words seriously: Rahul Gandhi

Update at 5:45 PM: The airplanes which were worth Rs 520 crore, why did you buy it for Rs 1600 crore?: Rahul Gandhi

Update at 5:44 PM: Anil Ambani has never made planes. Anil Ambani has a huge loss. On the other hand, HAL has been making aeroplanes 70 years. They have no debt: Rahul Gandhi

Update at 5:42 PM: We have been asking for Joint Parliamentary Committee. All the opposition has been asking for JPC. But Arun Jaitley is stuck, because permission is to be given by Narendra Modi: Rahul Gandhi

Update at 5:40 PM: During our time, the NPA's were Rs 2.5 lakh crore. Now, it is Rs 12 lakh crore: Rahul Gandhi

Update at 5:39 PM: Congress showed how to run the country. Please look at a record when Manmohan Singh was the PM. Arun Jaitley and Narendra Modi have destroyed the nation: Rahul Gandhi

Update at 5:38 PM: Demonetization wasn't a mistake, but it was an attack on you. It was a planned move to destroy you people, and help organizations like Amazon: Rahul Gandhi

Update at 5:37 PM: The intention of demonetization was to help the richest people in the country change their money from black to white: Rahul Gandhi

Update at 5:36 PM: Let Anil Ambani slap as many defamation cases as he can. It won't change the truth: Rahul Gandhi

Update at 5:35 PM: The main issue of demonetization is why PM Modi took money from small businessmen and youth, and gave it to the top 15-20 rich people: Rahul Gandhi

Update at 5:33 PM: The example of this is the Gujarat Co-operative bank. The bank in which Amit Shah is the director, Rs 700 crore was turned from black to white: Rahul Gandhi

Update at 5:32 PM: During demonetization, the friends of Narendra Modi turned their black money into white: Rahul Gandhi

Update at 5:31 PM: Narendra Modi took money from your pockets, and put it into the pockets of the top 10-15 business, who had NPA's against them: Rahul Gandhi

Update at 5:30 PM: I want to tell the small businessmen and youths about why demonetization was done: Rahul Gandhi

Update at 5:28 PM: PM has to answer the nation why he inflicted this damage on the country: Rahul Gandhi

Update at 5:26 PM: The whole money from demonetization is back. 2% GDP fell down and crores of people lost their jobs: Rahul Gandhi

Rahul Gandhi addresses news briefing on Demonetisation post Jaitley's blog post.


Finance Minister Arun Jaitley has written a Facebook post regarding the political controversy that has broken out over the revelation in the RBI's annual report released on Wednesday that stated that old Rs 500 and Rs 1000 notes amounting to 99.3% of the total value of demonetised currency in circulation at the time of demonetisation, i.e. on November 8, 2016, had been returned to the RBI by various means.  

Here is the full text of the blog post: 


Demonetisation and its impact on Tax collection and Formalisation of the Economy

The Reserve Bank has twice released its reports stating that the demonetised Notes of `500 and `1000 have been substantially deposited in the Banks. A widely stated comment has been that just because most of the currency came back into the Banks, the object of Demonetisation has not succeeded. Was the invalidation of the Non-deposited currency the only object of demonetisation? Certainly Not. The larger purpose of demonetisation was to move INDIA from a Tax Non-compliant society to a compliant society. This necessarily involved the formalisation of the Economy and a blow to the black money. How has this been achieved?

· WHEN cash is deposited in the Banks, the anonymity about the owner of the cash disappears. The deposited cash is now identified with its owner giving rise to an inquiry, whether the amount deposited is in consonance with the depositor’s income. Accordingly, post demonetisation about 1.8 million depositors have been identified for this enquiry. Many of them are being fastened with Tax and Penalties. Mere deposit of cash in a bank does not lead to a presumption that it is Tax paid Money.

· In March 2014, the number of Income Tax returns filed was 3.8 crores. In 2017-18, this figure has grown to 6.86 crores. In the last two years, when the impact of demonetisation and other steps is analysed, the Income Tax returns have increased by 19% and 25%. This is a phenomenal increase.

· The number of New Returns filed post demonetisation increased in the past two years by 85.51 Lakhs and 1.07 crores.

· For 2018-19, advance Tax in the first quarter has increased for personal Income Tax Assesses by 44.1% and in the Corporate Tax category by 17.4%.

· The Income Tax collections have increased from the 2013-14 figure of `6.38 Lakh crores to the 2017-18 figure of `10.02 Lakh crores.

· The growth of Income Tax collections in the Pre-demonetisation two years was 6.6% and 9%. Post-demonetisation, the collections increased by 15% and 18% in the next two years. The same trend is visible in the third year.

· The GST was implemented from 1st July, 2017 i.e. Post demonetisation. In the very first year, the number of registered assesses has increased by 72.5%. The original 66.17 Lakh assesses has increased to 114.17 Lakhs.

This is the positive impact of the Demonetisation. More formalisation of the Economy, More Money in the System, Higher Tax Revenue, Higher Expenditure, Higher Growth after the first two quarters.


RBI On Demonetisation: Of Total Value Of Demonetised Notes On November 8, 2016, Currency Equivalent To 99.3% Has Been Returned

What the Reserve Bank of India's annual report revealed:

In its annual report, India's central bank states that the total value of the demonetised currency, namely the old Rs 1000 and Rs 500 notes, on the day of demonetisation's announcement, i.e. November 8, was Rs. 15,417.93 billion (Rs. 15,417,930,000,000), while the total value of the notes, referred to as SBNs or Scheduled Banknotes, that have been returned from circulation is Rs. 15,310.73 billion. This means that 99.3% of the total value of demonetised currency that was in circulation at the time of demonetisation, has been returned, via various mechanisms, to the RBI.

Congress attacks Modi government on demonetisation:

Former Finance Minister P Chidambaram wrote:

"Every rupee of the Rs 15.42 lakh crore (barring a small sum of Ra 13,000 crore) has come back to the RBI. Remember who had said that Rs 3 lakh crore will not come back and that will be a gain for the government!?

I suspect that the bulk of the Rs 13,000 crore is currency in Nepal and Bhutan and some that was lost or destroyed. So, government and RBI actually demonetised only Rs 13,000 crore and the country paid a huge price.

Over 100 lives were lost. 15 crore daily wage earners lost their livelihood for several weeks. Thousands of SME units were shut down. Lakhs of jobs were destroyed. Indian economy lost 1.5 per cent of GDP in terms of growth. That alone was a loss of Rs 2.25 lakh crore a year."

 

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