Two years after: Jaitley defends note ban, opposition tears it apart

In a Facebook post, Jaitley described Prime Minister Narendra Modi's overnight ban on higher currency notes on 8 November 2016, as a "key step in a chain of important decisions taken by the government to formalise the economy".

But the Congress called it a "black day", and said Prime Minister Modi should apologise to the nation for destroying the economy.

On November 8, 2016, PM Modi had made the controversial announcement during a televised speech delivered at 8:15 pm, scrapping existing Rs500 and Rs1,000 notes with immediate effect. He said the objective of the exercise was to curtail black money and reduce the part played by counterfeit currency in funding terrorism and other illegal activities.

"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. The system required to be shaken in order to make India move from cash to digital transactions," Jaitley said.

In a blog post, Jaitley, while listing the number of reforms taken by the BJP-led NDA government to fight the black economy, said that demonetisation resulted in increasing the tax base and a higher tax collection (both  .. direct and indirect) for the government, thereby improving its fiscal health.

"The impact of demonetisation has been felt on collection of personal income tax. Its collections were higher in Financial Year 2018-19 (till 31-10-2018) compared to the previous year by 20.2 per cent. Even in the corporate tax the collections are 19.5 per cent higher. From two years prior to demonetisation, direct tax collections have increased 6.6 per cent and 9 per cent respectively" Jaitley wrote.

"The consequences of demonetisation are catastrophic", said senior Congress leader P Chidambaram. “Over 100 people died standing in queues, GDP growth fell by 1.5 per cent as predicted by the Congress party.

“The government no longer talks of Achhe Din. The only talk we hear is of Hindutva. Promise of Achhe Din lies in a shambles, PM Modi himself has resurrected divisive issues. I have no doubt people of the country have taken note and will respond,” he added.

Chidambaram further tweeted, “FM says “Confiscation of currency was not an objective of demonetisation”. Will someone please remind him of what he told the media and what the AG told the Supreme Court?”

Dravida Munettra Kazhagam (DMK) president MK Stalin termed demonetisation as a "man-made disaster for India".