Much headway in remonetisation, RBI pumping more money: Jaitley
29 December 2016
Finance minister Arun Jaitley today said the remonetisation process has substantially advanced and the Reserve Bank of India has very large currency available and that more notes of Rs500 are being released.
He said more currency is being re-circulated and the ability of banks to lend has increased, adding that not a single incident of unrest has been reported.
''On the November 8, the prime minister had asked for the country to support him notwithstanding several inconveniences being suffered by people during the remonetisation period.
''We are extremely grateful to the people of India who have in very large measure supported the move. The remonetisation process has substantially advanced and what is significant is not a single incident of any form of unrest has been reported in the country,'' Jaitley said.
''Already a large part of benefits of this historic move are visible. A lot more money has come into the banking system. Cash has an anonimity attached to it. What comes into the banking system gets identified with the person and therefore its impact on taxation and revenue collection is already being seen.
''The ability of the banks to lend has now increased. the revenue figures itself are more significant. We have till December 19, the direct tax figures of income tax which are now available and the net increase in the income tax so far has been to the extent of 14.4 per cent and if one factors in very large quantums of refunds because these days refunds are also made immediately, the net increase is 13.6 per cent till 19th of December,'' Jaitley pointed out.
Figures available till 30 November also show a significant increase in indirect taxation. ''In the central indirect taxes, the increase is 26.2 per cent till 30 November. And this includes excise duties increasing by 43.5 per cent, service tax increasing by 25.7 per cent and customs duties by 5.6 per cent,'' he said.
On an year-to-year basis the November of 2016 figures show that collection of all the three indirect taxes have been much high. Actual figures for November will be available by end-December, he said.
The increase or decrease is not very significant and in several areas which could have been impacted because of this move; For example in the field of agriculture, because we were also concerned that we should not cause any distress in the rural areas, the Rabi sowing ,overall for all crops, is 6.3 per cent higher than the last year.
''Now the Rabi crop sowing been higher than last year, life insurance businesses have increased, international tourism has increased, air passenger traffic has increased, petroleum consumption has increased, and the flow into Mutual Funds has increased by 11 per cent.
''Of course there would be areas which would be adversely impacted, but what was predicted by the critics has to have rationale with the revenue collection. Assessment can be unreal but revenue is real. And therefore many of these indicate that now with the critical part of the remonetisation already behind us, and there being significant impact in large number of these areas, it should certainly be much better in the weeks and months to come than it was in last month,'' he added.