The historic day of 8th November 2016 would be remembered as a defining moment in the history of Indian economy. This was the day when Indian Prime Minister Narendra Modi shocked the nation with the declaration of demonetisation and scrapped high value currency of Rs. 500 and Rs. 1000.
This day indicates the Government’s resolve to curb the menace of black money from the Indian Economy. It was considered as a well thought decision from the government and also a hidden urge of the larger section of our society to root out the curse of corruption and black money.
The government shows its intent to curb the corruption and black money in its early days when in May 2014, it decided to constitute SIT on black money.
Since then the government is trying hard to root out the corruption from the government machinery and society. From constituting SIT to demonetisation, from implementation of Benami Property Act to implement GST are some of the welcome steps in that direction.
India is celebrating the anniversary of much debated and argued demonetisation move. India has witnessed some sweet and sour moment post-demonetisation. Some areas where demonetisation gave a cause of concerns are poor GDP growth, low rate of job creation etc.
However, largely it has brought cheer to the Indian Economy as India reached 100th position in ‘Ease of Doing business’ report and as per IMF “Indian Economy on solid growth track”.
According to Manish Sabharwal, a director on the Board of RBI, the demonetisation move had made India a better habitat for formal job creation.
Henceforth in the backdrop of this move, we will see how India performed in last one year of post-demonetisation:
India’s highest ever unearthing of black money
• 17.73 lakh suspicious cases identified where cash deposit do not match tax profile.
• Rs. 3.68 lakh crore in 23.22 lakh bank account under suspicion.
• More than 4.7 lakh additional suspicious transaction reported by Banks and FIs.
• Rs. 16000 crore did not come back to the banks after demonetization.
• Undisclosed income worth Rs 29213 crore detected and admitted.
• Benami property worth Rs 1626 cr seized or attached.
Decisive blow to terrorism and naxalism
• Stone pelting incident in Kashmir came down by 75% from previous year.
• Incident of left wing extremism decreased by more than 20%.
• 7.62 lakh pieces of counterfeit currency detected.
India’s financial system being cleansed
• 2.24 lakh shell companies struck off.
• Many shell companies had more than 100 accounts each. One company had as many as 2134 bank accounts.
• A company with a balance of just a Rs 63.60 lakh, deposited Rs. 18.23 cr and withdrew 18.68 cr during demonetization.
• 28000 bank accounts belonging to 35000 shell companies deposited and withdrew Rs. 17000 cr post demonetization.
• A company with negative opening balance as on 8th November 2016, deposited and withdrew Rs 2484 cr post demonetization.
Great increase in formalization leading to better jobs for the poor
• Payment of wages act amended- direct payment in Bank Account.
• 50 lakh new bank account opened, enables cashless transaction of wages.
• 1.01 cr additional employees enrolled with EPFO.
• 1.3Cr workers registered with ESIC-Social security and health benefits for all.
Unprecedented increase in tax compliance
• Number of new tax payers increased from 66.53 lakh in 2015-16 to 84.21 lakh in 2016-17. The total increase of 26.6%.
• Number of e-returns filed increased from 2.35 crore in 2016-17 to 3.01 crore in 2017-18. Total increase of 27.95%.
Digital payment receives significant boost
• Number of digital transaction increased from 87 crore in August 2016 to 138 cr in August 2017, an increase of 58%.
• IMPS transactions in terms of value increased from Rs 26849 cr in August 2016 to Rs 65149 cr in August 2017. An increase of 59%.
• IMPS transactions in terms of volume increased from Rs.3.39 cr in August 2016 to Rs 7.57 cr in August 2017. An increase of 55%.
• Debit card transaction terms of value increased from Rs 18370 cr in August 2016 to Rs 35413 cr in August 2017. An increase of 48%.
• Debit card transaction terms of volume increased from Rs 13.05 cr in August 2016 to Rs 26.55 cr in August 2017. An increase of 50%.