Left Menu
Development News Edition

Confiscation of cash was not the aim: Jaitley on note ban


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 6.86 crore, an increase of 25 per cent over the previous year. This year, as on October 31, already 5.99 crore 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."

The actual consumption of goods and services being recorded in tax net had now increased, giving a buoyancy to the indirect tax growth, benefiting both the Centre and the states.

In 2014-15, the indirect tax to GDP ratio was 4.4 per cent. Post-GST it has climbed to 5.4 per cent.

"Rates of taxes, both direct and indirect, have been reduced, but tax collections have gone up. The tax base has been expanded. GST rates on 334 commodities which were paying an effective 31 per cent tax pre-GST have witnessed a tax reduction," he said.

Further, Jaitley said measures taken for digitisation including the Unified Payment Interface (UPI) and the Bharat Interface for Money (BHIM) have resulted in increased transactions.

"Today Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and RUPAY Card whose share have reached 65 per cent of the payments done through debit and credit cards," he said.

The Minister said more formalisation of the economy will lead to more revenue and more resources for the poor, better infrastructure and a better quality of life for the citizens.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.


TRENDING

OPINION/BLOG/INTERVIEW

Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...

Handling fake news Infodemic in time of Coronavirus epidemic

Social media has provided a platform where everybody can disseminate his her views without any supervision. Its excellent if the message is genuine but misinformation is equally disastrous. Health is such a topic where every Tom and Harry c...

Sentiment Analysis on Budget 2020: Long shot for solution to economic worries?

Industries and individuals alike had high expectations from the government to take tangible steps but the budget 2020 seems to have failed expectations....

Videos

Latest News

Canada to evacuate citizens from virus-hit cruise ship Thursday

The Canadian government will begin evacuating its citizens from a virus-hit cruise ship quarantined off Yokohama, Japan, on Thursday evening, Foreign Minister Francois-Philippe Champagne said on Wednesday. The aircraft the government has ch...

Kings trade D Martinez to Golden Knights

The Los Angeles Kings officially traded defenseman Alec Martinez to the Vegas Golden Knights on Wednesday, parting ways with another veteran. In exchange, the Kings will receive second-round draft picks in 2020 and 21. The pending deal was ...

Pawar demands trust for mosque in Ayodhya

NCP chief Sharad Pawar on Wednesday demanded the Centre to form a trust for building a mosque in Ayodhya similar to the trust to oversee the construction of Ram temple. Speaking at an event here, Pawar said You can form a trust for a temple...

UPDATE 1-Tunisia names new governmnet, avoids risk of early election

Tunisias designated Prime Minister Elyes Fakhfakh on Wednesday named a new coalition government after reaching an agreement with Ennahda moderate Islamist Party, the biggest power in Parliament, ending an ongoing political crisis of four mo...

Give Feedback