Demonetization process may be construed as a huge elephant and with our limited vision, we tend to look at one side of it, one small aspect of it and sometime which suits our negative belief to look down the Govt.
My belief is that it was the most comprehensive action taken ever by any PM in India to detect and curb black money in India. No previous government in the independent history of 7 decades have taken such a daring action against black money and parellel economy in the country. The ball-park assumption was that the parellel black economy running in India was almost as big as the formal white economy. Terror money, counterfeit currency, Overseas slush money coming through various NGOs etc. were making the economy very hot, inflation soaring at unprecedented levels and anti-India – anti-social activities going on unabated as never before.
The Demonetization process made black money hoarders to sit up and take help of all sorts of famous Indian”jugaad” methods and tools at “somehow” launder their ill-gotten, corruption money, black money and cash stashed in their homes and farms into bank accounts of known and “unknown” beneficiaries at a premium paid to them. Almost 9 lacs accounts with 6 lacs crores of black money was deposited illegally by ingenious, “Jugadu” Indians which are currently under a scrutiny by IT/ED.
This has provided enormous data to the Tax Authorities to keep them busy for the next 5-6 years – to find source of these cash funds and recover taxes and penalties for the Government. The Demonetization process has flushed out all the hoarders, Players, Tax Evaders in open and can no longer remain under veil of secrecy any longer. Many cases of seizures have popped out our eyes where 000’s of crores of cash and property accumulated with corruption and malpractices, and these are just tip of the huge iceburg.
Immediate impact was also seen that the number of Tax payer which remained incredibly at about slightly over 1.3% to go up to nearly 5% in the next 2-3 years’ time. Not a mean achievement for NDA government.
Now, we all agree that over 50% of commerce in India was in cash and we Indian always cut corners and say in market that “we don’t want bill, save us taxes”. All property deals generate huge black economy. Corruption at all places generates huge cash.
So, if you all please think carefully, Demonetization followed by GST Bill were two very important measures back-to-back to hit black economy very hard.
Now, if 50% plus trade and deals which were happening in cash goes off the market, impact on markets and GDP is inevitable. This is quite expected also. All those who are badly affected .. Politicians, Bureaucrats, businessmen – these politically motivated “RUDALISs” are the one who are crying foul.
Making of New India is under-process and we all have to support the enormous job taken by NaMo government.
SUPER SUCCESS OF DEMONETISATION
* Scrutiny of suspected 18 lakh accounts done
* Cash deposits worth Rs 2.89 lakh crore under investigation
* Advance data analytics tools identified 5.56 lakhs new suspect cases
* 4,73,003 suspicious transactions detected
* Undisclosed income worth Rs. 29,213 crore detected and admitted.
* Black money worth Rs 16,000 crore did not return post demonetisation
* 21 per cent reduction in currency in circulation
* 56 lakh new tax payers added in the first year itself!!
* Number of returns filed increase 24.7 per cent compared to 9.9 per cent in previous year
* Advance tax collections of personal income tax grow at 41.79 per cent over same period of last year
* Personal income tax under self-assessment tax grow at 34.25 per cent over same period last year.
* Transactions of more than three lakh suspected shell companies under the radar
* Nearly 3 lakh shell companies were de-registered
* Around 450 companies delisted and 800 untraceable companies to be further delisted
* More than 400 benami transactions identified and properties worth more than Rs 800 crore attached
* Deposits in the banking system increased around Rs 3 lakh crore
* Additional liquidity helped reduce interest rates by 100 basis points
* Digital payments increase by 56 per cent from 71.27 crore transactions in October 2016 to 111.45 crore transaction in May,2017