New Delhi: As soon as RBI disclosed that almost all of the Rs. 15.44 lakh crore junked currency had come back, Finance Minister Arun Jaitley has announced in media that deposits of “overwhelmingly large amount” of money in banks has ended anonymity around it and helped fix liabilities.
Jaitley further said that the fallout of the demonetisation of old 500 and 1000 rupee notes was on predicted line, with a hit on economic activity in one to three quarters but gains would accrue in medium to long term from integration of formal and informal economy.
The Reserve Bank of India, which had up till now shied away from revealing how much of junked currency came back to system post the November 8 note ban decision, in its annual report yesterday said banks have received Rs. 15.28 lakh crore, or 99 per cent of the currency invalidated.
If the official figures are anything to go by, the government had initially estimated about Rs. 5 lakh crore would not come back into the banking system as holders of unaccounted money may find it really tough to deposit them in banks – the only source allowed for getting rid of old currency.
Jaitley said despite the pain associated with demonetisation, the country was ready for this kind of change. “It’s nobody’s case that the black money has totally been eliminated. There are still people who will be doing such transactions. But, I think, a large amount of that has come in,” he said.
“When the demonetisation was initially announced there was an element of uncertainty. There has not been many such experiments world over and therefore it is natural that there will be speculation as to how much money will come back,” he said.
“It was clear that overwhelmingly large amount of money had come back into the banking system, something which was not of great consequences to us in the government,” he said. The finance minister said it is quite obvious that people found the ways and “I think it did shake the system.” But “the fact that money has got into the banking system doesn’t mean that they are legitimate money. Or the monies have got legitimately converted,” he said.
“It means that the anonymity around the money which was otherwise floating in the system has come to an end. The money got identified with the owner. And henceforth he was fixed with explaining the liability of the money,” he said. Jaitley said the fallout of demonetisation was on predicted line as “more and more people will now be compelled to come into the tax net.”