The Government of India canceled the Legal Tender Status of Rs.1000 and Rs.500 denomination currency notes on 8th November 2016 with several objectives. Please find the objectives of “Demonetization” and achievements against it.
1) Flushing out Black Money
A huge total of 89,920 cr. of ‘Black Money’ recovered under IDS, PMGKY and from old currency deposits.
Demonetization, have brought the undisclosed income of Rs 1,30,000 crore to tax. Measures have also led to seizure and attachment of assets worth approximately Rs 50,000 Cr.
Benami assets worth Rs 6,900 Cr and foreign assets worth Rs 1,600 CR. Have been attach 3.38 lac shell companies have detected and de-registered, and it disqualifies their directors.
Cash deposits of 2.89 lakh Crore under I-T investigation as per CVC. 18 Lac Accounts scrutinized & Notices being sent under ‘OCM’.
2) Eliminate Fake Indian Currency Notes (FICN) :
Counterfeit (Fake) Currency Notes have reduced by 81% post Demonetization i.e. 43.47 cr. in 2016-17 to 8.24 cr. in 2018-19 as per RBI data.
3) To strike at the root of financing of terrorism and left-wing extremism:
44 districts eliminated from the list of Maoist-hit areas. Several urban Maoists arrested because of terror financing.
4) To convert a non-formal economy into a Formal Economy to expand Tax Base and employment
56 lack New Taxpayers Added immediately post Demonetization. There was an 18% growth indirect tax collection in 2017-18 and an increase in tax base by 1.06 crore people filing ITR for the first time in FY 2017-18.
Over 1 crore workers added to EPF & ESIC immediately after Demonetization. Over ~2.5 crore jobs generated as per EPFO estimates post-2016.
5) To give a big boost to Digitization of payments to make India a less-cash economy:
Digital Translations have increased by 326% by volume & by 81% by value on the monthly basis post-2015-2016 FY till Sep 2019 as per NPCI data.
Moving average of ‘Currency to GDP Ratio’ remained 12.03% since 2004-05 to 2015-16, post Demonetization this ratio has come down to an average of 9.68% in the last 3 FY.