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Unprecedented rise in tax compliance, highest unearthing of black money: Govt justifies demonetisation on one-year anniversary

Demonetisation has been a historic and multi-dimensional success, the government said in full-page ads on one year of demonetisation.

Reported by: India TV Business Desk, New Delhi [ Published on: November 08, 2017 10:31 IST ]
The government said that 125 crore Indians fought a
Image Source : PTI The government said that 125 crore Indians fought a decisive battle against black money and corruption and won.

Amid an ongoing war of words between the Bharatiya Janata Party-led central government and opposition parties over the impact of demonetisation as it marks one year since its announcement, the government today said that the note ban exercise had led to India’s highest ever unearthing of black money and led to an unprecedented increase in tax compliance.

In full page advertisements published in all major national dailies, the government said that 125 crore Indians fought a decisive battle against black money and corruption and won.

“0.00011 per cent of India’s population deposited almost 33 per cent of total cash in the country,” the advertisement reads. It adds that the government has identified 17.73 cases where cash transactions made by individuals did not match their tax profile.

The government further said that cash deposits of Rs 3.68 lakh crore in 23.22 lakh accounts were under suspicion. The data seeks to blunt the opposition’s attack over the RBI data that said 99 per cent of the demonetised currency had returned.

The opposition had used this data to question the need for the exercise at all. Former Attorney General Mukul Rohatgi had said that the government expected Rs 4-5 lakh crore not to return to the system.

In another achievement cited by the government as an impact of demonetisation include “massive cleaning of the financial system”. Post-demonetisation data, the government said, had led to the identification of a maze of shell companies dealing in black money and hawala transactions.

“In a surgical strike on shell companies, 2.24 lakh companies struck off. 58,000 bank accounts belonging to 35,000 companies caught transacting Rs 17,000 crore after demonetisation,” the government said.

The government has also listed 26.6 per cent increase in new tax payers as an impact of demonetisation. While the year 2015-16 saw India add 66.53 new tax payers, 2016-17 witnessed 84.21 lakh people enter the tax net.

The note ban decision, the government asserted, has also dealt a decisive blow to terrorism and Naxalism.

“Stone-pelting incidents in Kashmir reduced by 75 per cent. Incidents of Left Wing Extremism down by more than 20 per cent. 7.62 lakh counterfeit notes detected.”

The government’s defence of its decision and its attempt to paint demonetisation as a “historic and multi-dimensional success’ comes amid opposition’s attacks against the government for what it has termed an “ill-conceived policy decision”. The opposition is observing November 8 as ‘Black Day’ to mark its protest against the note ban decision.

Meanwhile, Prime Minister Narendra Modi took to Twitter to thank the people of the country for their support to the government’s decision.

“I bow to the people of India for steadfastly supporting the several measures taken by the Government to eradicate corruption and black money,” he wrote.

PM Modi also posted a short film of the benefits of demonetisation.

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