Demonetisation ethical, transparent exercise: Jaitley's riposte to Manmohan Singh

The demonetisation of high-value bank notes carried out by the NDA government was an ethical and transparent exercise aimed at cleansing the system of illicit wealth and not an ''organised loot'' like the ''2G spectrum scam,'' the ''coal scam'' or the ''Commonwealth Games scam'', finance minister Arun Jaitley said responding to former Prime Minister Manmohan Singh's criticism of demonetisation - Singh called it a ''reckless'' exercise.

Arun Jaitley

Describing the 8 November 2016 decision to demonetise of Rs500 and Rs1,000 currency notes as ''a watershed moment for the Indian economy'', Jaitley on Tuesday said it not only changed the political narrative but also made corruption difficult.

It was a ''morally and ethically correct'' step, it was also ''politically correct,'' Jaitley said while making a powerful defence of the exercise on the eve of first anniversary of demonetisation.

Slamming the opposition Congress party for the poor state the economy where cash was king, Jaitley said BJP will observe 8 November as ''Aniti-Black Money Day'' while the opposition has announced it will observe it as ''Black Day.''

Jaitley said the Congress party is disillusioned with the economy reducing its excess dependence on cash and the status quo being shaken up.

On the contrary, he said the reform initiatives taken by the BJP-led government had lifted India's stature in the global economy.

Responding to former Prime Minister Manmohan Singh's criticism that demonetisation was a ''reckless'' exercise, Jaitley said the move was contradictory to the ''loot that happened in the second generation spectrum scam, Commonwealth Games and allocation of coal blocks''.

''An anti-black money drive is (an) ethical drive, a moral step. And what is morally and ethically correct has to be politically correct,'' he said.

On Singh's allegation that demonetisation had caused ''reputational damage to India as a peaceful and stable nation for economic policy'', Jaitley said, ''All that Dr Singh has to do is to compare the relative credibility of Indian economy internationally pre-2014 and post-2014. In pre-2014, you are being considered as an economy impacted by policy paralysis where the alphabet I (that stands for India) was being threatened to be knocked off BRICS. You were off the global radar. And today, there isn't an international agency which does not eulogise the kind and quality of the structural reforms Indian is making.''

Economy in healing mode
A year since demonetisation of high-value currency notes, the income-tax (I-T) department has identified 80,000 ''actionable cases'' where people have deposited cash of over Rs10 lakh each in bank accounts but have no tax profile.

The I-T department has sought explanations from these 80,000 people who have no record of income-tax filing in the system.

Some of them deposited cash of more than Rs 20 lakh in the bank account but have never filed returns.

Taxmen have shortlisted over 600,000 cases for scrutiny over huge inconsistencies in the cash deposits made during the period under the two phases of `Operation Clean Money'.

These are part of a status report on demonetisation which was prepared by the I-T department. The report will be tabled in the Prime Minister's Office (PMO) along with the action plan on what could be done further on the actionable cases.

Currently, tax officials are examining some of the profiles of people whose official income had no match with their cash deposits.

The status report also lists actions taken under the newly enforced Benami Transactions Act. Till now, the tax department has attached 475 properties, as against 1,000 properties identified post demonetisation. The attached properties are reported to be worth over Rs1,000 crore.

Mumbai and Chennai regions saw the highest number of cases where benami properties were attached provisionally accounting for nearly half of such cases. According to official data, 1.77 million suspicious cases involving Rs3.68 lakh crore were identified by the taxman in 2.3 million bank accounts post demonetisation. So far, I-T has received online responses from 1.18 million persons for 1.7 million bank accounts.

About 900 searches have been conducted by the department after the note ban, leading to seizures of assets worth Rs 900 crore, including Rs 636 crore in cash. So far, disclosures of Rs 7,961 crore undisclosed income have been made during searches.