India demonetisation figures deal blow to Modi

Posted September 02, 2017

"Post-demonetisation that number went close to 54-55 per cent but it has now come back to 45-46 per cent", the head of the online shopping site said. "As per the RBI's report the volume of cash currency has come down by 17 percent", the Finance Minister told reporters here. He was referring to Modi's promises to uncover black money, remove counterfeit notes and hit at financing of terrorism.

While Arun Jaitley said that it was a major step towards the formalisation of the economy and not exclusively confiscation of money, Chidambaram said that it was an objective that the NDA government set for itself.

He asked the prime minister to explain his Independence Day speech where he mentioned that Rs 3 lakh crore of black money had been unearthed and challenged him to make public the list of companies and individuals whose undeclared money it was.

Congress rubbished as "obfuscation" the government's claims that demonetisation had led to an increase in taxpayers and curbed black money, and asked PM Narendra Modi to apologise to the nation for history's "biggest scam".

The biggest embarrassment for the government was when it claimed that more than 99 percent of the cash had been deposited.

He said that apart from all these aims, the note-ban also was a jolt to the separatists and they suffered heavy financial losses as money was seized and could not reach the terrorists also.

Sharma wondered what the note ban decision had achieved as 99 per cent of the money had been returned, and accused the prime minister of "changing the narrative" on the issue. And an extension of that is what the tax collections are.

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He wrote, '99% notes legally exchanged! As of June 30, total demonetised currency which returned back to the system stood at Rs 15.28 lakh crore. According to the report, the central banking institution's "net income from domestic sources decreased by 17.11 per cent from ₹52,157 crore in 2015-16 to ₹43,232 crore in 2016-17". The lower payout to the government by the RBNI this year was due to printing costs RBI transferred Rs 13,140 crore to its Contingency Fund and unlike the last three years, this year there was hardly any bolstering of the reserve. The intent of the drive, he said, was "to break the grip of corruption and black money".

The growth has also been impacted by the imposition of Goods and Sales Tax (GST) that was imposed by the government on July 1.

Experts like him, who defend demonetisation, suggest that now the depositors can not escape scrutiny as the information is available with the government on who has how much cash.

"Some people had expected a very large shock to economic growth on account of demonetisation", the statement read.

He said that the RBI should feel ashamed for recommending demonetization where it lost 1% of the money and also spent extra money in printing new currency notes.

According to the report issued by the RBI, for the financial year, 2016-17 now total of 3285 million notes of 2000 are in circulation, worth the value of 6571 billion rupees and 5882 million notes of 500 are in circulation worth the value of 2941 billion rupees.

AFP/Getty Images An Indian bank employee checks stacks of new 2000 rupee notes in Ahmedabad on November 11, 2016. Those who have never fought a war against black money in life, they probably could not understand the objective of this whole process.