Mumbai: On the second anniversary of demonetisation, Finance Minister Arun Jaitley said the decision never aimed to confiscate currency but to get it into the formal economy and make the holders pay tax.
As the opposition targeted the Prime Minister Narendra Modi-led government on the move, Jaitley described demonetisation as “a key step in a chain of important decisions taken by the government to formalise the economy”.
In a Facebook post, the Union Finance Minister wrote, “An ill-informed criticism of the demonetisation is that almost the entire cash money got deposited in the banks.
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”.
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.
“Those who failed to do so are being prosecuted under the Black Money Act. Details of all accounts and assets abroad 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 difficult to evade the tax system”.
“In May, 2014, when the present Government was elected the total number of the filers of income tax returns was 3.8 crore. In the first four years of this Government, it has increased to 6.86 crore. By the time the first five years of this Government are over, we will be close to doubling the assessee base,” the finance minister wrote.
Defending demonetisation, he further said, “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.”
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.
Since then, several opposition leaders have highly criticised PM Modi while the members of the BJP and its allies have supported the decision.