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21
November 2016
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| S.B.I (The Total Investment & Insurance Solutions) |
In September, there was a
substantial increase in bank deposits compared with deposits in the same month
over the past two years, which is remarkably different from the trend. While
opposition parties are making a big hue and cry about it, this increase can be
attributed to arrears payments from the seventh Central Pay Commission (CPC)
and the Income Disclosure Scheme (IDS), say a research report from State Bank
of India (SBI).
The Total Investment & Insurance Solutions
The Ecowrap report says,
"Firstly, we believe, around Rs1.56 lakh crore of deposits could have been
incrementally added in September 2016, if we take the average of past three
years. Secondly, around Rs45,000 crore in the form of arrears of seventh CPC
were deposited in the bank accounts in the first week of September 2016. We
thus believe that a large part of the residual amount worth Rs85,818 crore
could have been deposited in the banks because of reasons related to IDS that
ended on September 2016. Alternatively, given that IDS attracted a penalty of
45%, people may have preferred to disclose these as forceful deposits or
advance tax payments so as to pay a tax of 30% and not 45%." The Total Investment
& Insurance Solutions
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| Increase in Deposits (The Total Investment & Insurance Solutions) |
Over the past two years, aggregate
deposits of the banking system have continued to grow in the range of 8.8% to
12.0%. However, in the month of September 2016, there was a substantial
increase in deposits by Rs2.87 lakh crore, which is remarkably different from
the trend. The monthly increase in deposits of the banking system in the last
one year can be read from the adjoining figure. Additionally, our trend
analysis indicates that the average increase in deposits in the month of
September in the last 12 years has been around Rs1 lakh crore, the report says.
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| Increase in Deposits 2(The Total Investment & Insurance Solutions) |
SBI in the Ecowrap report says,
"In 1997 as well, a similar scheme to voluntarily disclose income was
initiated in which a total amount of Rs33,697 crore was disclosed leading to
total tax collection of Rs9,800 crore. We noticed that during that period the
increase in incremental deposits in the terminal month when the scheme ended
was significantly high. Our research shows that possibly a 20% increase in
incremental deposits was because of IDS scheme at that point of time." The Total Investment
& Insurance Solutions
"We believe the IDS scheme may
have just provided the momentum to Government tax collections. Coupled with the
demonetisation scheme launched recently, there is now a possibility of
unaccounted money not coming back to the system or whatever is coming back may
possibly be taxed. This will ensure that Government tax collections in FY17
will remain satisfactory, notwithstanding the gradual rebound in growth,"
SBI concluded in the Ecowrap report.The Total Investment & Insurance
Solutions
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