DeMon turns 1: Here's how Modi's demonetisation worked
Mumbai: Exactly a year ago, on this day, Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes in his ‘surgical strike’ against black money, counterfeit notes, corruption and terrorism.
Overnight, this move turned 86 per cent of India’s cash in circulation illegal as Rs 500 and Rs 1,000 notes ceased to be legal tender.
A year on, let us see what changes note ban made to our lives:
1. Spurt in digital transaction – With the economy facing an immediate cash crunch, there was a spurt in digital transaction in the months following note ban. “Volume of all digital transactions increased by about 23 times with 63,80,000 digital transactions for a value of Rs 2,425 crore in March 2017, compared to 2,80,000 digital transactions worth Rs 101 crore till November 2016,” Niti Aayog had said in a statement.
Digital transactions include those conducted via credit and debit cards, unified payments interface (UPI), prepaid payment instruments (PPIs), mobile wallets, Internet banking and mobile banking.
The government has also actively campaigned for switching to digital transaction and moving towards a ‘cashless economy’.
2. Lens on suspicious transactions: With Rs 15.28 lakh crore of the total Rs 15.44 lakh crore of the demonetised currency coming back into the system, the government has been able to identify the owners of each currency note and match their deposits with their income declarations.
The Income Tax (I-T) Department in August said that cash deposits worth Rs 2.89 lakh crore made by 9.72 lakh person since demonetisation are under scanner. The deposits have been made in 13.33 lakh accounts.
“..during search and seizure by the Department Rs 15,497 crore of undisclosed income has been admitted which is 38 per cent higher than the undisclosed amount admitted during 2015-16; and undisclosed income detected during surveys in 2016-17 is Rs 13,716 crore which is 41 per cent higher than the detection made in 2015-16,” said Finance Minister Arun Jaitley on Tuesday.
3. Increasing the tax base of the country: According to data provided by the Finance Minister, 56 lakh new individual tax payers filed their returns till August 5, 2017 while last year this number was about 22 lakh. “The amount of Advance Tax paid by non-corporate tax payers during the current year has also increased by about 42 per cent during 1st April to 5th August,” said Jaitley.
4. Significant elimination of fake currency: During 2016-17, the detection of Fake Indian Currency Note (FICN) for Rs 1000 denomination increased from 1.43 lakh pieces to 2.56 lakh pieces.
During 2015-16, there were 2.4 pieces of FICNs of Rs 500 denomination and 5.8 pieces of FICNs of Rs 1000 denomination for every million pieces notes processed. This number rose to 5.5 pieces and 12.4 pieces, respectively post note ban.
According to the government, this led to reduction in incidences of stone pelting, protests in Jammu and Kashmir and naxal activities in Left-wing extremism-affected areas,
5. Increased awareness about black money: Although there have been a lot of debates about the actual elimination of black money post demonetisation, the fact remains that the government’s note ban campaign definitely raised more awareness regarding black money. It also served as a major warning to hoarders of cash, who realise the intense public and government surveillance on them.