Skip to main content

Note ban objectives achieved, says Jaitley

Note ban objectives achieved, says Jaitley
Defending demonetisation, Finance Minister Arun Jaitley on Wednesday said those who did nothing to fight black money during their tenures had tried to confuse people about the real objectives of the note ban.

The objective of the November 8 ban of the old Rs 1,000 and Rs 500 notes was not how much money would return to the system, Jaitley said, addressing a new meet after the Reserve Bank of India’s (RBI’s) annual report that showed nearly all of demonetised currency had, in fact, come back.

He added that all objectives of the move, which sucked Rs 15.44 lakh crore out of the economy and hit growth in the short term, had been met. “The real objective of demonetisation was formalisation, attack on black money, less cash currency, bigger tax base, digitisation, and a blow to terrorism. And, we do believe that in each of these areas, the effect has been extremely positive.”

In its annual report, the RBI disclosed that only 1 per cent of total amount of scrapped currency had not returned to the system. The remaining 99 per cent — Rs 15.28 lakh crore — was in, as of June 30.

Targeting the critics of demonetisation, especially those in previous governments, Jaitley said, “People who had not taken a single step during their tenure against black money have not understood the intent behind demonetisation.”

Senior finance ministry officials, who were involved in the planning and implementation of demonetisation, also defended the move.

“The short-term, small negative impacts… on economic activity have played out fully. Long-terms positives will continue to strengthen fundamentals. With the RBI disclosing the numbers of returned notes today (Wednesday) and the measure having been successfully implemented, debate should be over,” Economic Affairs Secretary Subhash Garg tweeted.

An official who was also a part of the note ban team told Business Standard on the condition of anonymity that banned notes coming back into the system was just one of the objectives.

“We all knew most of the currency could eventually come back. What one should also look at are other parameters such as increased tax compliance, unearthing black money, and digitisation. And, it is not that the money that has come back is now all white. There are discrepancies, which the RBI and tax department will examine,” he said.

The finance ministry later released a statement corroborating this claim. “A significant portion of SBNs (specified bank notes) deposited could possibly be representing unexplained/black money,” the statement said, adding 1.8 million accounts were being scrutinised under the Operation Clean Money. “Since November 2016 and until the end of May 2017, a total of Rs 17,526 crore has been found as undisclosed income and Rs 1,003 crore has been seized.”

The statement also said as a result of demonetisation, there was a substantial increase in the number of income tax returns filed. As of August 5, there had been increase of 24.7 per cent, compared to 9.9 per cent the previous year.

“Transactions of more than 300,000 registered companies are under the radar of suspicion while 100,000 companies were struck off the list. The government has already identified more than 37,000 shell companies, which were engaged in hiding black money and hawala transactions,” the finance ministry statement said, adding terrorist and Naxalite financing were stopped almost entirely as a result of demonetisation. Details about this, however, were not provided.

The Business Standard, New Delhi, 05th September 2017

Comments

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...