Confiscation of cash was not the aim: Jaitley

new delhi — As the country completed two years of demonetisation, Finance Minister Arun Jaitley on Thursday said the objective was not to get the cash deposited in banks but to move towards a more formal economy that he claimed is giving rich dividends.

“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,” Jaitley said in a Facebook blog.

“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,” he added.

Demonetisation was a key step in a chain of important decisions taken by the government to formalise the economy, he said.

Other major decisions include targeting the black money outside India, application of technology in filing of returns and expanding the tax base, financial inclusion to integrate weaker sections with the formal economy, Jan Dhan accounts, Aadhaar law, Direct Benefit Transfer and the Goods and Services Tax (GST). “It is now becoming increasingly difficult to evade the tax system,” he said.

The minister said direct tax collections in the two years prior to demonetisation had risen by 6.6 per cent and 9 per cent, which in the two years post-demonetisation rose by 14.6 per cent and 18 per cent with increases registered both in personal income tax and corporate tax.

Similarly, in the year 2017-18, the tax returns filed reached 68.6 million, an increase of 25 per cent over the previous year. This year, as on October 31, already 59.9 million returns have been filed which was an increase of 54.33 per cent compared to the previous year.

“In May 2014, when the present government was elected, the total number of the filers of income tax returns was 3.8 crore... By the time the first five years of this government are over, we will be close to doubling the assessee base,” he said.

Demonetisation and implementation of the GST curbed cash transactions and boosted digital transactions, the minister said.

“This formalisation of the economy has led to the tax payer base increase from 6.4 million in the pre-GST regime to 12 million tax payers in the post-GST regime.” —

On the second anniversary of demonetisation, the Indian economy is yet to recover from the disaster imposed on our economy and the people by Prime Minister (Narendra) Modi.

CPI (M)

The government cheated our nation with this big #Demonetisation scam. It ruined the economy and the lives of millions. People will punish those who did this.

Mamata Banerjee, Bengal CM