The Prime Ministers Office put up a spirited defence of demonetisation on the eve of the first anniversary of the move, saying “multiple benefits” of spiking large currency notes included loans getting cheaper and real estate prices declining “significantly”. “Loans got cheaper since lending rates declined by around 100 basis points,” the PMO said in a Twitter campaign on Tuesday to defend the move of scrapping Rs 1,000 and Rs 500 notes on November 8 last year. It said that on average revenues of urban local bodies across the country “increased almost three times after demonetisation” — compared to corresponding period of the previous.
“Revenues of urban local bodies in Uttar Pradesh increased four times. Revenues of urban local bodies in Madhya Pradesh increased almost five times,” the PMO said. The digital payments, according to the PMO, received a “significant boost” of 58% – from 87 crores in August 2016 to 138 crore in August this year. “More than 13 lakh points of sale machines (were) added just in one year as compared to existing 15 lakh machines since their usage started.” It also boasted of “unprecedented increase in tax compliance” post the note ban.
The number of new taxpayers added in 2015-16 was 66.53 lakh and it jumped to 84.21 lakh by the end of 2016-17 – a 26.6% increase. The number of e-returns filed in 2016-17 stood at 2.35 crore while in the first seven months the figure saw a jump of nearly 28% to touch over 3 crore mark. The move, the PMO said, also led to “massive cleaning of India’s financial system”. It said that 58,000 bank accounts belonging to 35,000 shell companies deposited and withdrew Rs 17,000 crore post demonetisation.
After this, 2.24 lakh shell companies were struck off. Among other benefits, the PMO counted that decreased proportion of high demonetisation currency in the economy helped in the government’s fight against corruption and funding of terrorism. “The estimated value of high denomination notes at the end of September 2017 is approx Rs 12 lakh crore. Without demonetisation, the values of high denomination notes would have been around Rs 18 lakh crore today. “Thus, high denomination notes have been effectively brought down by about Rs 6 lakh crore — which is 50% of the current value in circulation. Decreased proportion of high demonetised notes in the economy helps thwart corruption and funding of terrorism.”