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The International News Weekly india
November 09, 2018 | Toronto 08
Demonetisation led to formalisation of
economy, expanded tax base: Jaitley
New Delhi: Finance
Minister Arun Jaitley on
Thursday said demonetisation
resulted in formalisation
of economy
and increased tax base,
prompting the government
to earmark more
resources for the poor
and infrastructure development.
In a Facebook post
on the second anniversary
of Demonetisation,
Jaitley said in first four
years of the National
Democratic Alliance
(NDA) government, the
number of income tax
returns filers has gone
up to 6.86 crore from 3.8
crore in May 2014.
“By the time the first
five years of this government
are over, we will be
close to doubling the assessee
base,” he said in
the post titled “Impact Of
Demonetisation”.
The demonetisation
of Rs 500 and Rs 1,000
currency notes in November
2016, the minister
said, had resulted
in “more formalisation
(of economy), more revenue,
more resources
for the poor, better infrastructure,
and a better
quality of life for our
citizens.”
He further said with
the implementation of
the goods and services
tax (GST), it is now becoming
increasingly difficult
to evade the tax
system and the indirect
tax to gross domestic
product (GDP) ratio has
gone up to 5.4 per cent
post GST, from 4.4 per
cent in 2014-15.
Terming the criticism,
that almost the entire
cash money got deposited
in the banks post
demonetisation, as “illinformed”,
Jaitley said
confiscation of currency
was not an objective of
demonetisation.
“Getting it into the
formal economy and
making the holders pay
tax was the broader objective.
The system required
to be shaken in order to
make India move from
cash to digital transactions.
This would obviously
have an impact on
higher tax revenue and a
higher tax base,” Jaitley
said.
The government had
on November 8, 2016, announced
ban on old 500
and 1000 rupee notes, to
curb black money in the
system.
Of the Rs 15.41 lakh
crore worth Rs 500 and
Rs 1,000 notes in circulation
on November 8,
2016, 99.3 per cent or
notes worth Rs 15.31 lakh
crore have returned to
the banking system.
This means, just Rs
10,720 crore of the junked
currency did not return
to the banking system.
After the note ban,
old junked notes, called
specified bank notes
(SBNs), were allowed to
be deposited in banks
with unusual deposits
coming under income
tax scrutiny.
Jaitley said demonetisation
compelled holders
of cash to deposit the
same in the banks.
“The enormity of
cash deposited and identified
with the owner resulted
in suspected 17.42
lakh account holders
from whom the response
has been received online
through non-invasive
method,” he said.
The violators faced
punitive actions. Larger
deposits in banks improved
lending capacity
for the banks.
A lot of this money
was diverted to mutual
funds for further investments.
It became a part
of the formal system,
Jaitley added.
He said the share of
indigenously developed
payment system of unified
payments interface
(UPI) and RuPay card
have reached 65 per cent
of the payments done
through debit and credit
cards.
Jaitley said in 2017-
18, the tax returns filed
reached 6.86 crore, an increase
of 25 per cent over
the previous year.
This year, as on October
31, 2018, already
5.99 crore returns have
been filed — which is an
increase of 54.33 per cent
compared to the previous
year till this date.
As many as 86.35 lakh
new filers were added
this year.
Economic Affairs
Secretary Subhash
Chandra Garg said demonetisation
and GST
reflect long-term vision
of the government and
its ability to undertake
massive structural reforms.
“Tax filers under
both direct and indirect
taxes are close to getting
doubled. Digital payments
have risen sharply
and become common
place. Fake notes are
out,” Garg tweeted.
PM offers prayers at Kedarnath shrine
Kedarnath: Prime Minister Narendra
Modi offered prayers at Kedarnath
shrine on Wednesday and extended Diwali
greetings to the soldiers posted on the
India-China border.
After offering prayers, the Prime Minister
met the locals gathered at the temple
of Lord Shiva near the Mandakini river.
He later reviewed the ongoing development
works in Kedarpuri.
Before offering prayers, the PM celebrated
the festival with jawans of the Indian
Army and Indo-Tibetan Border Police
(ITBP) personnel at Harsil village near the
India-China border.
Greeting the soldiers on the festive occasion,
he said that their devotion to duty
in the remote icy heights is enabling the
strength of the nation and securing the future
and the dreams of 125 crore Indians.
In 2016, PM Modi went to Himachal
Pradesh to celebrate the festival with
Indo-Tibetan Border Police personnel at
an outpost. Last year, he celebrated Diwali
with jawans at Gurez in Jammu and
Kashmir. AGENCIES