Critical part of remonetisation already behind us: Jaitley

The net increase in the income tax so far has been to the extent of 14.4 percent

GN Bureau | December 29, 2016


#Remonetisation   #Demonetisation   #Arun Jaitley   #Cashless Economy   #Cashless  


“Assessment can be unreal but revenue is real. And therefore many of these indicate that now with the critical part of the remonetisation already behind us, and there being significant impact in large number of these areas, it should certainly be much better in the weeks and months to come than it was in last six weeks,” finance minister Arun Jaitley said on Thursday.

“Of course there would be areas which would be adversely impacted, but what was predicted by the critics has to have rationale with the revenue collection,” he told the media.

Jaitley said that the remonetisation process has substantially advanced and what is significant is not a single incident of any form of unrest has been reported in the country.

“The RBI has very large amounts of currency available and it will continue to support the market to the extent that the market needs that kind of liquidity. Amongst the currency which was in circulation on November 8, a very large part has already been replaced and would continue to be replaced to the extent that market requires that currency. More and more notes of Rs 500 are also being released through the banking and post offices and therefore we can see a lot of currency coming into recirculation which is enabling the banking system and the ATMs to further augument the supply itself,” he added.

The minister said that already a large part of benefits of this historic move are visible. A lot more money has come into the banking system. Cash has an anonymity attached to it. What comes into the banking system gets identified with the person and therefore its impact on taxation and revenue collection is already being seen.

“The ability of the banks to lend has now increased. The revenue figures itself are more significant. We have till December 19, the direct tax figures of income tax which are now available and the net increase in the income tax so far has been to the extent of 14.4 percent and if one factors in very large quantum of refunds because these days refunds are also made immediately, the net increase is 13.6 percent till 19th of December.”

Jaitley said that the indirect tax figures are also available and there is a significant increase in indirect taxation. In the central indirect taxes, the increase is 26.2 percent till November 30. And this includes excise duties increasing by 43.5 percent, service tax increasing by 25.7 percent and customs duties by 5.6 percent.

Also read: Are we ready to go cashless?

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