While staunch critics claim the original motive of curbing black money circulation and weeding out fake notes has not yet been met, the government on the other hand has continuously defended the move, saying it has made the country more tax compliant. 99.35 per cent of demonetised currency is back into the banking system Almost all demonetised currency back into banking system
The Narendra Modi led government had listed curbing unaccounted money as the major reason for the note ban. On the other hand, the Reserve Bank of India's annual report for 2017-18 revealed that of the total Rs 15.41 lakh crore demonetised notes, Rs 15.31 lakh crore worth notes had been returned, which meant 99.35 per cent of demonetised currency had found its way back into the banking system.Fake note detection decreased by 31.4 per cent
Fake notes come down
The RBI report said a total of 5.22 lakh counterfeit notes were detected in 2017-18. The figure is a sharp decline from 7.62 lakh notes in 2016-17, a decrease of 31.4 per cent.
While the fake note detection decreased by close to 60 per cent in the case of Rs 500 and Rs 1000 denominations, the figure increased for Rs 50 and Rs 100 notes.
“Compared to the previous year, there was an increase of 35 percent in counterfeit notes detected in the denomination of Rs 100, while there was a noticeable increase of 154.3 percent in counterfeit notes detected in the denomination of Rs 50,” the report stated. Self-assessment tax worth Rs 6,416 crore paid
Income tax returns increase
Defending the note ban, Union finance minister Arun Jaitley earlier this year said, "When the impact of demonetisation and other steps is analysed, the income-tax returns have increased by 19% and 25%.” The number of new returns filed post-demonetisation increased in the last two years by 8.551 million and 10.7 million, respectively, yielding higher tax."
The government also added that more than 2 lakh non-filers came clean about their deposits. Additionally, a total of 2.09 lakh non-filers paid self-assessment tax worth Rs 6,416 crore.7, 965 crore was spent on printing new notes in 2016-17
Rs 13,000 crore spent on remonetising
In the same RBI report, it was found that the Union government spent a net amount of Rs 13,000 crore to remonetise the Indian economy, as banks did not get back the specific amount.
Rs 7, 965 crore was spent on printing new notes in 2016-17, while Rs 4,912 crore were spent in 2017-18.
Interestingly, the RBI refused to reveal the amount spent on shredding the Rs 15.31 lakh crore worth demonetised currency.
World Bank's sign of approval
The World Bank in a report in April said that the Indian economy seemed to have recovered from the impact of demonetisation. It forecast a growth rate of 7.3 per cent for India in 2018, and 7.5 per cent for 2019 and 2020, thus making the nation the fastest growing economy.
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