99% OF BANNED NOTES RETURNED, SAYS RBI REPORT
All but 1% of ~1,000 and ~500 denomination banknotes (by value) invalidated on November 8 had been returned by the end of June, according to the Reserve Bank of India’s annual report released on Wednesday.
Note ban was not an exercise to confiscate money... objective was to bring down cash in economy, bring digitisation, expand tax base and fight black money ARUN JAITLEY, finance minister
MUMBAI: All but 1% of ~1,000 and ~500 denomination banknotes (by value) invalidated on November 8 had been returned by the end of June, according to the Reserve Bank of India’s annual report released on Wednesday.
The disclosure put to rest one of the big mysteries surrounding the exercise, billed as one of the biggest-ever assaults on black money and, according to some analysts, helped the Bharatiya Janata Party win popular support and the crucial Uttar Pradesh polls earlier this year.
The report said 98.96% of the ₹1,000 and ₹500 denomination banknotes that had been invalidated had been returned. The central bank said “subject to future corrections based on verification process when completed,” the estimated value of the banned notes it “received” was ₹15.28 trillion. This compares with the ₹15.44 trillion of the banned notes that were in circulation as of November 8, according to data given by minister of state for finance Arjun Meghwal to Parliament on January 21.
Following PM Narendra Modi’s announcement of the invalidation of high-value currency notes, estimates suggested around ₹3 trillion would not be returned because it was unaccounted or black money.
While defending demonetisation in the Supreme Court in November, then attorney general Mukul Rohatgi said around ₹4-5 trillion would probably not find its way back into the system.
By December, though, it was clear that tax evaders had managed to legalize their unaccounted money using mules and proxies to make deposits, made high-value purchases using back-dated bills and colluded with bank officials to exchange old currency. With the Reserve Bank of India (RBI) data showing that most of the money has returned to the system, the opposition was quick to criticise the government. The Congress party said RBI’s report was proof that demonetisation had “utterly failed”.