Prime Minister Narendra Modi used his Independence Day speech on Tuesday to once again extol the virtues of demonetisation, which he insisted was proof that he had waged “a big war against corruption and black money”. Modi made a few grand claims about the move, which resulted in all currency notes of Rs 500 and Rs 1,000 in value being withdrawn on November 8 , 2016, and replaced with new ones.

The massive effort, which saw 86% of India’s currency sucked out of the system, caused huge disruptions across the country. It led to a number of deaths and affected the economy in ways we are still struggling to understand. All of this was accompanied by a relatively opacity from the government, which has still refused to divulge details about much of the currency withdrawal scheme.

In Tuesday’s speech, Modi made a number of claims about demonetisation that managed to be as vague as everything else the government has put out on the subject. A fact check of Modi’s claims follows. Read the entire speech here.


  • Claim: “After forming the government, our first task was to constitute an SIT [Special Investigation Team]. Today, after three years, I want to tell the countrymen proudly that we have confiscated black money worth Rs. 1.25 lakh crores, the culprits will be brought to book and forced to surrender.” 
  • Check: The government unearthed more than that amount over the last three years but it does not mean all that money is surrendered to the state. Instead, most of it is likely to be penalised and taxed. According to a reply to a Lok Sabha question, across Income Tax department searches, surveys, a compliance window and an Income Declaration scheme until 2016, the government had calculated Rs 1.35 lakh crore of undisclosed income.
  • Claim: “According to the research conducted by outside experts, about Rs 3 lakh crores that had never come into the banking system before, has been brought into the system after the demonetisation. More than Rs. 1.75 lakh crores deposited in the banks is under the scanner. Black money worth Rs. 2 lakh crore had to be deposited in the banks and this system has forced them to be accountable.” 
  • Check: This set of statements is thoroughly confusing, and mostly unattributed. Modi says Rs 3 lakh crore of money has entered the system that was never in formal banking before, that black money Rs 2 lakh crore had to be deposited in the system, and that Rs 1.75 lakh crore is under the scanner. He does not explain why only Rs 1.75 lakh crore is under the scanner if the government has identified Rs 2 lakh crore of black money. It is also unclear which “outside experts” Modi is referring to. A story by PTI, attributed to an anonymous senior official earlier this year said that the government estimated Rs 3 lakh crore-Rs 4 lakh crore of previous undeclared income had been put into the banking system. A Reserve Bank of India report estimates “excess deposits”, not unaccounted income, as being between Rs 2.7 lakh crore and Rs 4.3 lakh crore.   
  • Claim: “This year, see the results, from 1st April to 5th August more than 56 lakh people filed personal income tax returns. Last year in the same period it was just 22 lakh. That’s more than double. These are the results of our fight against corruption.” 
  • Check: It is true that 56 lakh more individuals filed returns in that specific period – from April 1 to August 5, 2017. But the comparison is cherry picked and therefore does not tell us much. As Boom points out here, by changing the time periods in which it has looked at income tax returns, the government is claiming a big jump where there may be none. The only apples-to-apples comparison will come when full returns figures are released after the financial year.
  • Claim: “Over 18 lakh people have been identified, whose income is much higher than what their declared income and therefore they have to clarify this. Around 4.5 lakh people have now come forward and are trying to trade the right path after accepting their mistakes. One lakh people, who had neither heard of Income Tax nor paid Income Tax, have now been forced to do so.”
  • Check: Revenue secretary Hasmukh Adia said notices would be sent to 18 lakh taxpayers for transactions that seemed out of line. In Parliament, the government said it had sent communications, not notices, to 18 lakh taxpayers and had heard back from 9.27 lakh. There is no official information about the other two figures Modi used, whereby 4.5 lakh have accepted their mistakes and 1 lakh count as those who have never paid taxes before.
  • Claim: “After demonetisation we did data-mining. Then we found three lakh companies, which were only shell companies. They were involved in havala dealings. Three lakh, can you imagine. And we have canceled the registration of 1.75 lakh of them. Shut five companies in India and it’s like a storm. We shut 1.75 lakh. Those who steal the country’s riches will have to answer for their deeds, this is what we have done. There were some shell companies which on just one address they had four hundred companies registered.”
  • Check: Modi has mentioned identifying three lakh shell companies before. On record, however, this is what was told to the Lok Sabha: “As on 12.07.2017, Ministry of Corporate Affairs has removed 1,62,618 Companies from the Register of Companies by following the due process under Section 248 of the Companies Act, 2013.” This answer however, does not attribute the deleted companies data mining after demonetisation. The Lok Sabha reply also mentions that I-T department investigations over the last three years have led to detection of just 1,155 shell companies.