Arun Jaitley on Demonitisation: Confiscation of cash was not the aim

As the country completed two years of demonetisation Finance Minister Arun Jaitley on Thursday said the objective was not to get the cash deposited in banks but to move towards a more formal economy that he claimed is giving rich dividendsAn illinformed criticism of the demonetisation is that almost the entire cash money got deposited in the banks Confiscation of currency was not an objective of demonetisation Getting it into the formal economy and making the holders pay tax was the broader objective Jaitley said in a Facebook blogThe system required to be shaken in order to make India move from cash to digital transactions This would obviously have an impact on higher tax revenue and a higher tax base he addedDemonetisation was a key step in a chain of important decisions taken by the government to formalise the economy he saidOther major decisions include targeting the black money outside India application of technology in filing of returns and expanding the tax base financial inclusion to integrate weaker sections with the formal economy Jan Dhan accounts Aadhaar law Direct Benefit Transfer and the Goods and Services Tax GSTIt is now becoming increasingly difficult to evade the tax system he saidThe Minister said direct tax collections in the two years prior to demonetisation had risen by 66 per cent and 9 per cent which in the two years postdemonetisation rose by 146 per cent and 18 per cent with increases registered both in personal income tax and corporate taxSimilarly in the year 201718 the tax returns filed reached 686 crore an increase of 25 per cent over the previous year This year as on October 31 already 599 crore returns have been filed which was an increase of 5433 per cent compared to the previous yearIn May 2014 when the present government was elected the total number of the filers of income tax returns was 38 crore By the time the first five years of this government are over we will be close to doubling the assessee base he saidDemonetisation and implementation of the GST curbed cash transactions and boosted digital transactions the Minister saidThis formalisation of the economy has led to the tax payer base increase from 64 million in the preGST regime to 12 million tax payers in the postGST regimeThe actual consumption of goods and services being recorded in tax net had now increased giving a buoyancy to the indirect tax growth benefiting both the Centre and the statesIn 201415 the indirect tax to GDP ratio was 44 per cent PostGST it has climbed to 54 per centRates of taxes both direct and indirect have been reduced but tax collections have gone up The tax base has been expanded GST rates on 334 commodities which were paying an effective 31 per cent tax preGST have witnessed a tax reduction he saidFurther Jaitley said measures taken for digitisation including the Unified Payment Interface UPI and the Bharat Interface for Money BHIM have resulted in increased transactionsToday Visa and Mastercard are losing market share in India to indigenously developed payment system of UPI and RUPAY Card whose share have reached 65 per cent of the payments done through debit and credit cards he saidThe Minister said more formalisation of the economy will lead to more revenue and more resources for the poor better infrastructure and a better quality of life for the citizensCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updatesThis story has been sourced from a third party syndicated feed agencies Except for the change in the headline the story has been provided ASIS AS AVAILABLE without any verification or editing from our side Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever