The NDA government has argued that demonetisation has effectively wiped out Rs 6 lakh crores of black money from the Indian economy, even as an angry Opposition has dubbed it as a failure crippling jobs and small industries.
A finance ministry’s background note to a parliamentary panel stated that based on RBI reports, there is a reduction of around 50% of high-value notes that would have been in circulation if the demonetisation had not happened. The Opposition, however, has argued that as nearly the entire cash has returned to the system, the efforts to curb black money has not yielded the desired results.
The Parliament’s standing committee on finance, however, decided to expand the scope of its review of demonetisation and black money and will now seek inputs from states and various ministries to study the “full impact of demonetisation”. “A draft report that was under preparation from August has now been shelved,” said a member of the finance panel.
The ministry note said that as on November 8, the specified bank notes (high-value) were of the value of 15.44 crores. And given the growth rate of these bank notes in previous years, the notes would have amounted to Rs 18 lakh crore in November 2017.
“Reserve Bank of India has reported that the specified bank notes of estimated value of Rs 15.28 lakh crores was deposited back by June 2017. The estimated high-value notes at September-end are approximately Rs 12 lakh crores—a decrease of 50% of the high value notes that would have been in circulation today without demonetisation,” the note said.
It also pointed out that new high-value notes of Rs 500 and Rs 1000 were of the order of Rs 2.94 lakh crores and 6.57 lakh crores respectively on March 31, 2017.
Several Opposition members, however, continued to question economic affairs secretary Subhash Garg and financial services secretary Rajiv Kumar on the merits of demonetisation on Thursday. Some members asked the officials on the cost incurred by the government to scrap the two high-value notes and then bring in the new Rs 2000 notes. A member wanted to know about the cost of demonetisation and why the banks, sitting on piles of money after the huge cash inflow during demonetisation, are not giving enough credit. According to members, the officials sought time for a written reply.
One BJP member reportedly admitted that in his constituency, many bidi workers are jobless and starving after demonetisation.