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7 November 2017
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| Demonetisation (The Total Investment & Insurance Solutions) |
Mounting a powerful defence of the
demonetisation measure designed to curb black money, Finance Minister Arun
Jaitley on Tuesday said that note ban cannot be a one-stop solution to cleanse
all corruption, but it did give a "new direction" to economic and
financial decisions.
"Demonetisation is not a one-stop
solution to end corruption. It cannot be, but it did change the agenda. And
that changed agenda is that we should go towards less-cash economy. Individual
tax payers` number has increased, digital transactions have gone up and terror
funding has squeezed," Jaitley said on
eve of note ban anniversary. The Total Investment
& Insurance Solutions
The Finance Minister said he was "more
than satisfied" with the new direction the economy is moving. The Total Investment & Insurance
Solutions
"We
at BJP believe that for the nation`s economy and its future, it was necessary
to change the status quo. Domination of cash in any economy, especially having
86 percent of currency as high denomination notes, and excessive cash
transactions lead to tax evasion. In such cases the taxpayers have to bear the
burden, of the evaders too," Jaitley said.
He said it is unjust that resources meant for
the country`s development and welfare of the poor should be kept in rich
people`s coffers. He said that though corruption will not end even in less-cash
system it will become difficult to indulge in corruption. The Total Investment & Insurance
Solutions
Referring to November 8, 2016 as a watershed
moment in the history of the Indian economy, Finance Minister said one of the
important objectives of demonetisation, which was to make the country a less
cash economy and reduce the flow of black money, had been met. The Total Investment & Insurance
Solutions
November 8, 2016 will be viewed with pride by
next generation as it provided them a fair and honest system to live in,
Jaitley said.
But he conceded, in his
Facebook post, that the benefits of the move may not be immediately visible to
some people, though they would be apparent to the coming generation. "The
next generation will view post November, 2016 national
economic development with a great sense of pride as it has provided them a fair
and honest system to live in," he added.
Jaitley said one of the important objectives
of demonetisation was "to make India a less cash economy and thereby
reduce the flow of black money in the system. The reduction in currency in
circulation from the base scenario reflects that this intended objective has
been met," the Finance Minister said in a facebook post. The minister has
said this before, but Prime Minister Narendra Modi in his November 8 speech had
not mentioned this objective.
Jaitley in his post said the published figure
of "currency in circulation" for half year ending September, 2017
stood at Rs 15.89 lakh crore, showing year-on-year variation of (-) Rs 1.39
lakh crore. The Total Investment &
Insurance Solutions
"...whereas year-on-year variation for
the same period during last year was (+) Rs 2.50 lakh crore. This means that
reduction in currency in circulation is of the order of Rs 3.89 lakh
crore," said the minister.
The RBI in its Annual Accounts reported that
Specified Bank Notes (SBNs) of estimated value of Rs 15.28 lakh crore was
deposited back as on June 30, 2017.
The outstanding SBNs as on November 8, 2016
were of Rs 15.44 lakh crore value. The total currency in circulation of all
denominations as on November 8, 2016 was Rs 17.77 lakh crore. The Total Investment & Insurance
Solutions
Jaitley added that when demonetisation was
implemented, one of the intended objectives was to put identity on the cash
holdings in the economy.
"With the return of Rs 15.28 lakh crore
in the formal banking system, almost entire cash holding of the economy now has
an address. It is no more anonymous," the minister asserted.
"From this inflow, the amount involving
suspicious transactions based on various estimates ranges from Rs 1.6 lakh
crore to Rs 1.7 lakh crore. Now it is with the tax administration and other
enforcement agencies to use big data analytics and crack down on suspicious
transactions," he added.
Jaitley informed that the number of
suspicious transaction reports filed by banks during 2016-17 has gone up to
3,61,214 from 61,361 in 2015-16. He mentioned that the increase during the same
period for financial institutions was from 40,333 to 94,836 and for
intermediaries registered with SEBI the increase was from 4,579 to 16,953. The Total Investment & Insurance
Solutions
The minister said the exercise to remove the
anonymity with currency has further yielded results in the form of 56 lakh new
individual tax payers filing their returns till August 5, 2017. The Total Investment & Insurance
Solutions
"Self-Assessment Tax (voluntary payment
by tax payers at the time of filing return) paid by non-corporate tax payers
increasing by 34.25 per cent during April 1 to August 5 in 2017 when compared
to the same period in 2016," he wrote in the social media post. The Total Investment & Insurance
Solutions
Jaitley said with data collected during
demonetisation period leading to identification of 2.97 lakh suspect shell
companies, further actions were taken under the law to stop operation of bank
accounts of these struck-off companies.
"Simultaneously, Income Tax Department
has taken action against more than 1,150 shell companies which were used as
conduits by over 22,000 beneficiaries to launder more than Rs 13,300
crore," he said.
Pointing out towards other benefits of
demonetisation, Jaitley wrote that the attempt towards curbing of black money
led to an acceleration in the financialisation of savings, and the country has
taken a big leap in digital payment during 2016-17 with a shift to less cash
economy.
"In an overall analysis, it would not be
wrong to say that country has moved on to a much cleaner, transparent and
honest financial system," Jaitley wrote in conclusion.The Total Investment & Insurance
Solutions
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