During 2017-18, there was some positive impact of demonetisation on the widening of the tax base. … The Central Board Of Direct Taxes (CBDT) said 6.87 crore Income Tax Returns (ITRs) were filed during FY 2017-18 as compared to 5.48 crore ITRs filed during FY 2016-17, translating into a growth of 25 per cent.
What is the effect of demonetisation in an economy?
We find that districts that experienced more severe demonetisation shocks had: larger contractions in ATM withdrawals; larger reductions in economic activity, as measured by satellite data on human-generated nightlight activity and a survey-based measure of employment; slower credit growth; and.
Is demonetization good or bad for Indian economy?
According to the statistics released in the Survey, the Demonetization had led to Rs 2.8 lakh crores less cash (Equivalent to 1.8% of GDP) and Rs 3.8 lakh crores less high denomination notes (Equivalent to 2.5% of GDP) in the Indian economy.
Was demonetisation good for India?
Demonetisation also hit small-scale businesses. According to the Centre for Monitoring Indian Economy (CMIE), demonetisation caused loss of about 15 lakh jobs. The CMIE compared the employment data for January-April 2017 with the figures for the September-December quarter of 2016, when demonetisation was implemented.
What are the advantages and disadvantages of demonetisation?
Advantages of Demonetisation
Large sums of black money was kept hidden by tax evaders. Demonetisation helped government uncover huge amount of unaccounted cash. According to estimates made by RBI, people have deposited more than rupees 3 lakh crores worth of black money in the bank accounts.
What are the bad effects of demonetisation?
A survey on the impact of demonetisation, done three years after it was done, has revealed its impact — 32 per cent said it caused loss of earnings for many unorganised sector workers, 2 per cent said it was a sizable migration of labour to villages and lowered rural income while 33 per cent said the biggest negative …
Is demonetisation a failure?
Twenty-one months on, and with nearly 99.3% or Rs 15.31 lakh crore of the notes back in circulation, demonetisation—touted as one of the government’s biggest economic reforms—has not only failed to achieve any of the stated objectives, but has left a trail of destruction in its wake.
Is demonetisation is good or bad?
notes which made over half of the cash in the economy redundant, the currency with the public has more than doubled from a low of nearly Rs 7.8 lakh crore it had hit” following the demonetisation decision. In fact, currency with the public exceeds now its level prior to the demonetisation announcement.
Why did demonetization fail in India?
Hence, demonetisation has failed in its two major objectives. The funny thing is that there were no estimates of how much black money was held in the form of cash. The government admitted as much, after having announced the policy. … India’s large cash economy was badly hit by the policy.
Who did first demonetisation in India?
The first ordinance was the Bank Notes (Declaration of Holdings) Ordinance, which required all banks and government treasuries in British India to furnish to the Reserve Bank of India a statement of their holdings of banknotes of Rs 100, Rs 500, Rs 1,000 and Rs 10,000 as at the close of business on the previous day by …
How has demonetisation helped India?
On the fourth anniversary of demonetisation, Prime Minister Narendra Modi on Sunday said the move helped in reducing black money, increase tax compliance and formalisation of the economy. … Demonetisation has helped reduce black money, increase tax compliance and formalization and given a boost to transparency.
How has demonetization affected India?
During 2017-18, there was some positive impact of demonetisation on the widening of the tax base. The Income Tax department said it added 1.07 crore new taxpayers while the number of dropped filers’ came down to 25.22 lakh.
Which is the major drawbacks of the Indian economy?
Some of the major drawbacks found in Indian Economic Plans are: 1. Unrealistic Plans, 2. Lack of Pragmatic Approach 3. Faulty Implementation 4.
What is the main reason for demonetisation?
The professed reason for India’s disruptive demonetisation policy was to curb “black money” as well as to combat the proliferation of counterfeit currency tied to criminal and terrorist activities. The short-term liquidity crunch and cascading disruption to the economy have been palpable.
What is the benefit of demonetisation?
Compared to the trend that prevailed, demonetization has increased the direct tax-to-GDP ratio by 0.2%, 0.8% and 1% amounting to ₹40,000 crore, ₹1.25 trillion and ₹1.89 trillion in direct taxes in 2017, 2018 and 2019, respectively.