The Narendra Modi government may not get the desired result post demonetisation of high-value notes as the banks have till now received about nearly Rs 10 lakh crore worth of scrapped notes, and numbers may surge with still three weeks to go for the deadline to deposit invalidated 500 and 1,000 rupee notes.
According to a Times of India report, Centre estimated that demonetisation might flush out about Rs 3 lakh crore in black money that may never come back to banks. But with Rs 9.85 lakh crore already deposited and more expected to be deposited in banks by December 30, the Centre’s estimate might get a blow.
“The government expected at least 10 per cent of the Rs 14.6 lakh crore to disappear for good: a prospect which would have reduced the RBI's liability and it could have passed on the money thus saved as dividend to the government,” Times of India quoted sources as saying.
Sources feel the endless stream of deposits illustrate that those with illegal hordes have been able to find ways to convert "black" into deposits.
Sudden surge in Jan Dhan accounts is the one example.
Black money hoarders are using poor people's Jan Dhan accounts to deposit money so that they can safely convert the undeclared, untaxed income into white.
Taking a note of this, government on November 24 cautioned Jan Dhan account holders, housewives and farmers that they will be prosecuted under the I-T Act for allowing misuse of their bank accounts through deposit of black money in Rs 500/1,000 notes.
Even PM Modi, while addressing a public gathering in Moradabad on December 3, had made an appeal to the owners of Jan Dhan accounts not to withdraw money deposited by blackmarketeers in their accounts.
“The honest have queued up outside the banks, the corrupt are standing outside the houses of the poor after demonetisation. Do not withdraw money deposited by blackmarketeers in Jan Dhan accounts. I am finding ways to put behind bars those guilty of stashing their black money into the Jan Dhan accounts of the poor,” he had said.
Meanwhile sources still believe that “Substantial amount of black money still be flushed out and this, coupled with what is expected to be realised by higher tax and penalty on undeclared cash, will help the Centre justify demonetisation.”