EAC to PM says Tax compliance improved after demonetisation

Economic Advisory Council to the Prime Minister (EAC-PM) member Shamika Ravi has said the tax compliance has increased after demonetization, though in hindsight it appears that the whole process could have been handled in a better manner.

Ravi, also a senior fellow at Brookings India, further said that there is a need for more tax rationalization to reduce the compliance burden.

"Have you seen the tax compliance (after demonetization)? Why do you think that has happened?

"...Implementation of demonetization was definitely questionable. Just the fact that we brought Rs 2,000 notes, that defies the logic of delegitimizing of high-value currency notes," she told PTI in an interview.

On November 8, 2016, Prime Minister Narendra Modi had announced the demonetization of high-value currency notes.

According to recent RBI data, of the Rs 15.41 lakh crore worth Rs 500 and Rs 1,000 notes in circulation on November 8, 2016, when the note ban was announced, currency worth Rs 15.31 lakh crore has returned to the banking system.

Ravi also stressed on the need for rationalizing GST tax and laws related to real estate sector.

"Tax rationalization has to happen, particularly when it comes to real estate sector...Can GST be rationalized further, yes it can be? The compliance burden has to be reduced," she emphasized.

Replying to a question related to depreciation of the rupee, the EAC-PM member said that falling rupee should not be seen as falling power of the country.

The rupee on Friday had slumped to a fresh record low of 71 against the dollar for the first time ever on persistent demand for the US currency amid rising crude prices.

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