Arun Jaitley says demonetisation increased tax base

New Delhi: Finance minister Arun Jaitley on Thursday staunchly defended the demonetisation drive, saying “prophets of doom” have been proven wrong as hard data of two years shows an increase in tax base, greater formalisation of the economy and India retaining the fastest growing economy tag for the fifth year in a row.

On the second anniversary of the shock note ban, Mr Jaitley wrote a Facebook blog ‘Impact of Demonetisation’, listing an 80 per cent jump in income tax return filers to 6.86 crore and increase in digital transactions and more resources being available for poor and for building better infrastructure as the main achievements.

With depositing junked currency in banks only mode left to liquidate holding of old 500 and 1,000 rupee notes, the government was able to track down people holding cash beyond their known sources of income.

“The enormity of cash deposited and identified with the owner resulted in suspected 17.42 lakh account holders from whom the response has been received online through non-invasive method,” he wrote.

Since the money came into bank accounts, the holders were forced to file income returns, which went up from 3.8 crore in May 2014 to 6.86 crore. “By the time the first five years of this government are over, we will be close to doubling the assessee base,” he said.

Responding to criticism from opposition parties, Jaitley said India clocking the fastest growth rate has proved “prophets of doom”, who had predicted that demonetisation will shave off 2 per cent of growth rate, conclusively wrong.

Opposition parties led by Congress launched a scathing attack on the government, with former Prime Minister Manmohan Singh terming demonetisation as an “ill-fated” and “ill-thought” exercise, whose “scars and wounds” are more visible on the second anniversary of the “economic misadventure”.