Return of most demonetised notes shows effective collection by RBI and banks, says Finance Ministry
It claimed the Centre had achieved its goals through the note ban – a drop in terror funding, rise in IT Returns and seizure of crores of black money.
The Centre on Thursday lauded the Reserve Bank of India and the country’s banks for their role in ensuring that demonetisation was “immensely beneficial to the Indian economy and people”.
“The fact that the bulk of SBNs [specified bank notes Rs 500 and Rs 1,000] have come back to the banking system shows that the banking system and the RBI were able to effectively respond to the challenge of collecting such a large number of SBNs in a limited time,” the Finance Ministry said.
The statement comes a day after the RBI, in its annual report, said more than 99% of the value of the currency that was scrapped in November, which was pegged at Rs 15.44 lakh crore, had been returned to banks till June 30. The amount stands at Rs 15.28 lakh crore.
Operation Clean Money
It also claimed that through Operation Clean Money, Income Tax Department had recovered black money in crores after conducting searches on various entities, which led to “seizure of cash and admission of undisclosed income”. “Since November 2016 and until the end of May 2017, a total of Rs 17,526 crore has been found as undisclosed income, and Rs 1,003 crore has been seized,” the ministry said. “The investigation/scrutiny is going on.”
The Finance Ministry, led by Arun Jaitley, also claimed that the demonetisation drive had resulted in “a substantial increase in the number of Income Tax Returns filed”. It highlighted that the government had identified more than 37,000 shell companies that were hiding black money and hawala transactions.
The Centre further said that funding of terrorist and naxalite groups had “stopped almost entirely” since the note ban. The ministry made the claim even though reports of attacks by militant groups in Jammu and Kashmir and Maoist strikes in Chhattisgarh and Jharkhand continue to make news.
‘We manged the transition extremely effectively’
In the press release, the ministry also made a jibe at the Opposition and other critics of demonetisation. “Some people had expected a very large shock to economic growth on account of demonetisation,” it said. “Their expectations have been belied. India has continued to be on path of one of the strongest growths in the world...The government has been able to manage the transition extremely effectively and with the least pain.”
