Demonitisation fails as 99% of notes remian unaccounted- RBI report

In the absence of any such clarity, it only strengthens the feeling that the demonetisation resulting in the return of all the scrapped notes into the system has only facilitated the conversion of black money into white. “In the last three years, the length has been doubled to 14,465 km”, he said.

Announcing the policy on 8 November past year, Mr Modi had told the nation its aims were to target both counterfeit currency and “black money”. If one took the cash in pipeline which is with the Co-operative Banks, the Rural Banks, Gramin Banks, also under treaty with Nepal and Bhutan, then one would see that nearly all of the money was back, which was surely not the money which was with the smugglers or with the terrorists or proceeds of crime.

Mr Jaitley, however, said demonetisation had other goals: increasing electronic transactions; pulling more people into the formal banking system by encouraging them to open accounts; and crippling terrorists by cutting down on their access to cash. The banks which were struggling because of the NPA (non-performing assets or “bad loans”) problem, will now have a lot more money to lend for agriculture, infrastructure, and social sector, as also for trade and industry.

On the Goods and Services Tax (GST), Jaitley said its inflationary impact has been avoided and there is a scope of convergence of tax rates going forward. Banerjee said in a Facebook post.

While the government would definitely be able to unearth some amount of black money from the deposits made by individuals as well as companies, it would be naïve on the part of people and foolish on the part of government to expect that the amount revealed could justify the cost of demonetisation paid by the country. The outstanding SBNs as on 8th November, 2016 were of Rs. 15.44 crore value. We haven’t yet started questioning people, but have only studied the data.

The Prime Minister urged the officers to work towards improving the processes of governance.

When asked about the government’s demonetization, the former RBI governor Raghuram Rajan had said: “My sense is the clever find ways around it”.

“Until June 30, 2017, SBNs (special bank notes of Rs 500 and Rs 1,000) were received by the Reserve Bank either directly or from bank branches/post offices through the currency chest mechanism”. Money laundering can not be the objective of demonetisation. After the note ban exercise, he had told India Today in an interview: “It is a very big mistake, both in terms of its objective of dealing with corruption as well as the objective of one rapid jump of getting into a cashless economy”. Taking into consideration, the value of SBNs now reported to have been counted, approximately 98.96 per cent of SBNs in value terms have come back to the RBI after demonetisation. In fact, the government spent more money on printing new currency and recalibrating ATMs than what it had really got.

Jaitley stressed that that the much debated move has also helped in expanding the tax base of the country.