For very long, the RBI claimed to have failed to finish counting the money that came in through the Note Ban. But now the cat is out of the bag.
According to the RBI, 99% of the demonetized currency returned came back into the system.
That means that the RBI gained just Rs 16000 crore from demonetization – while it spent more than Rs 21000 crore just on printing new notes, and a lot more on reconfiguring ATMs. So Demonetization meant a net LOSS to the exchequer.
Recall that after November 8, 2016, the RSS and BJP propaganda machine worked overtime to convince the poor that the corrupt rich people were being forced to throw away sack loads of black money held in demonetized Rs 500 notes – and that this ‘surgical strike’ on black money would result in massive windfall gains for the Government, which could be used to fund housing for the poor and other welfare measures. Now it is clear that this was a lie: either black money was not being held in demonetized currency; or demonetization has helped whitewash black money! And at the end of the day, the currency reserves stand depleted not enriched as a result of the costly farce of demonetization.
Now, what about the direct lies that Modi and his men told the country and Court about Note Ban?
Attorney General Mukul Rohatgi told the Supreme Court that the Government expected, through Note Ban to ‘neutralise” “Rs 4-5 lakh crore…used in northeast and Jammu and Kashmir to fuel trouble in India.” After the RBI data exposed this lie, Finance Minister Arun Jaitley said that Rhoatgi’s was just a “speculative claim,” while a “Government source” told media that Rohatgi’s remarks was just “court craft deployed by lawyers to win brownie points.” “Speculative claim”, “court craft” – so basically another “chunavi jumla” that has become the routine mode of governance for the Modi regime!
Modi himself has, in the past, claimed – without citing any credible source – that Rs 3 lakh crores entered the banking system for the first time, that black money worth Rs 2 lakh crores had been deposited, and that Rs 1.75 lakh crore was “under the scanner.” Will he admit now that these numbers were plain lies?
Jaitley, trying to shift the goalposts, claimed that the “tax base” has been widened. That too is a dubious, unproven tall tale, about which the PM, Finance Minister, Economic Survey etc all claim wildly varying and mutually contradictory claims. Modi in his Independence Day speech claimed that 56 lakh new taxpayers filed tax returns between April and August 2017 which was double the number of new taxpayers in the same period last year. These numbers and this comparison simply do not add up. First, the number of new taxpayers cited by the Economic Survey since the Note Ban announcement till March 2017 is 5.4 lakhs; the number cited by Modi pertains to e-returns filed, and includes both old and new taxpayers. Even this number represents only a modest increase – with the growth in e-returns filed being much higher in previous years during the UPA regime. The Finance Minister meanwhile claimed the addition of 91 lakh new taxpayers since demonetization – another mystifying and inflated number pulled out of the hat. The subsequent clarification given is that this number is for the entire financial year of 2016-17 – but it does not match the Economic Survey’s assessment which placed the total number of new taxpayers in the 2016-17 financial year at 80.7 lakhs (“Fact Check: Demonetisation’s Effect on Increase in Direct Taxes and Income Tax Base, The wire.in, 16/8/17”). Further, the Government in reply to a question in the Rajya Sabha on 1 August 2017, had stated that the number of new taxpayers post demonetization is 33 lakh!
Which ‘source’ in this government is to be believed then, when everyone is engaged in a competitive con-game? It is anyway a well known fact that every year the number of new taxpayers increases; there is simply no data yet to show that demonetization has resulted in a substantially greater increase in new taxpayers than in previous years.
Then, there is the claim that demonetization has resulted in increased digital transactions – i.e a “less cash” economy. Again, this is a lot of hot air. The RBI data itself shows that while digital transactions spiked in December (when the people were being denied access to their cash thanks to the Note Ban), now digital transactions have dipped to a five-month low.
Remember the pain and devastation that Note Ban has caused: more than 100 deaths, months of desperate suffering and job losses for the poor in the informal sector? Now it is time to make the Modi Government pay for the Note Ban Scam.
