Scars from 2016 only getting more visible: Manmohan Singh on demonetisation

Galtero Lara
Noviembre 8, 2018

Today marks the second anniversary of the ill-fated and ill-thought demonetisation exercise that the Narendra Modi government undertook in 2016. Speaking on the criticism of demonetisation that nearly the entire cash money got stashed in banks, Jaitley said confiscation of currency notes was not the sole aim of the demonetisation; getting it into the formal economy and making the holders pay tax was the broader objective.

The three reasons given for demonetisation were that it would curb black money, weed out fake notes and proscribe terror financing, but two years later none of those objectives have materialised, Tewari alleged.

Jaitley said getting the money into the formal economy and making the holders pay tax was the broader objective of the notes ban decision.

He also said that the government first targeted the black money outside India and asset holders were asked to bring this money back on payment of penal tax. Details of all accounts and assets overseas which have reached the government resulted in action against the violators, he added.

Jaitley also said that following the note ban, it is "now becoming increasingly hard to evade the tax system".

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There were 3.8 crore filers of income tax returns when the NDA government came to power in May 2014. In the first four years of this Government, it has increased to 6.86 crore.

The prime minister stood up two years ago on November 8 and addressed the nation, demonetising nearly Rs 16.99 lakh crore in circulation, Tewari said.

Also Read Demonetisation: A bold step or a failed move? The tax base has been expanded.

Since then, several opposition leaders have highly criticised PM Modi while the members of the BJP and its allies have supported the decision.

On November 8, 2016, the Centre had declared Rs 500 and Rs 1,000 notes as non-legal and introduced new Rs 500 and Rs 2,000 notes.

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