Benefits of Demonitization

The overall economic growth of the Indian economy is dependent on many factors that, inter-alia, include the rate of capital formation and savings, utilization of technology, availability of infrastructure, efficiency of resource allocation, quality of institutions, governance and the policy framework in place, money supply and degree of financial development. Further, the situation after the cancellation of legal tender character of old denomination banknotes is being regularly monitored in the Government.

Diplomatic Missions have written to convey their appreciation for the Government’'s recent effort to make our economy more transparent and as a move that will also have a positive impact on FDI.

Reserve Bank of India (RBI) and the Banks have been advised to step up the supply of cash to the public. The availability of cash and issuance of cash to bank branches and Post Offices on a daily basis is being constantly monitored and necessary rebalancing is being done for more efficient allocation of banknotes of requisite denominations between different areas. Further, on the basis of feedback/suggestions received from various quarters, Government has taken various steps to ameliorate the inconvenience caused to the public, the information regarding which is available at finmin.nic.in.

About ₹ 370 crores of cash and jewellery has been seized by the Income Tax Department since the cancellation of legal tender character of old high denomination banknotes. The total undisclosed income admitted before the Department is more than ₹ 2500 cores. Close coordination is being maintained with other enforcement agencies for action against the offenders as an on-going process which includes searches, surveys, enquiries, tax assessment, levy of penalties and filing of prosecution complaints in criminal courts, wherever applicable.

This was stated by Shri Arjun Ram Meghwal, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha.