Finance Minister Arun Jaitley has finally admitted that Demonetisation was haphazardly implemented to bring down the quantum of cash operating in the system and integrating the informal economy with the formal one to widen the tax base. Therfore, the government used black money and curbing terror financing as an excuse for banning high value denominaton notes and instead fulfiled their purpose of increasing government revenue and tightening the money flow for the public.
Modi’s motive behind demonetisation was to assist the digital companies to exoand their area of operation across the country. The government had claimed that the black money and the terror financing would be eliminated by withdrawing the high currency notes has also been proved false as the Reserve Bank of India (RBI) has now disclosed that almost 99 per cent of Rs 500 and Rs 1,000 currency notes which were withdrawn from circulation on November 8, 2016 has returned to the central bank, thus raising questions about the overall gains and the impact on the economy, especially the informal sector, because of the disruption it caused.
Thus Modi gave a wrong impression to the world community that India is a corrupt nation where peopel evade tax but he chose to forget to fulfil the promise he made in 2014 Lok Sadha elections that he would bring back black money stashed in foreign bank accounts and distribute the same among the Indian citizens. The way he diverted the national issue of Black Money on which the BJP came to power was stunning.
Even the restrictions of withdrawing Rs 25000 per day that was imposed during Demonetisation are still in place. Jaitley pointed out that post demonetization, the direct tax base has already started expanding and those dealing in cash currency are now compelled to deposit the money in banks. The informal sector consisting of farmers and petty traders, who were finding it tough to survive are committing suicide. And the industries and companies who used cash for paying their workers in cash are shrinking and there are large scale retrenchment adding to unemployment in the country.
Modi government and cabinet ministers who are engaged in hailing the demonetization and digital transactions are unaware of the risks invloved due to lack of cybersecurity laws. Because if there happens to be any cyber attack by any foreign rogue element then the money will be siphoned off without any check.
Disclaimer: The views express are personal