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Centre Denies Having Done Any Impact Assessment of Demonetisation on Economy

The two senior Congress leaders had asked whether a former Governor of Reserve Bank of India and several renowned economists have recently stated that ban on high value currency notes in 2016 and rollout of GST in July 2017 have caused 'really hard blows' to the economy.

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Updated:December 14, 2018, 5:59 PM IST
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Centre Denies Having Done Any Impact Assessment of Demonetisation on Economy
Representative photo. (Image: Reuters)
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New Delhi: The Centre in reply to a Lok Sabha question on Friday said it has done no assessment or study on the impact of demonetisation on the economy.

Minister of State for Finance P Radhakrishnan in response to the question denied having done any impact assessment and said, “As per data published in Annual Report 2017-18 of the Reserve Bank of India, the total value of Specified Bank Notes (SBNs) in circulation as on November 8, 2016, post verification and reconciliation, was Rs 15,417.93 billion, and the total value of SBNs returned from circulation was Rs 15,310.73 billion.” SBNs refer to the demonetised old Rs 500 and 1,000 notes.

99.3 percent of the old Rs 500 and 1,000 notes that were banned overnight in November 2016 were returned, the Reserve Bank of India said in its annual report.

In an address to the nation on November 8, 2016, Prime Minister Narendra Modi had announced that banknotes of Rs 500 and Rs 1,000 would cease to be legal tender that midnight. He had said this would end the flow of black money and fake currency.

In Lok Sabha on Friday, Union Finance Minister Arun Jaitley denied that the Reserve Bank of India had “rejected” two key justifications of demonetisation – curbing black money and counterfeit notes – while giving its approval to the decision.

Jaitley also told the House that the government does not comment on the views of former RBI governors on demonetisation and the GST expressed before the media.

He was replying to a question in this regard by Congress parliamentarians Jyotiraditya Scindia and Kamal Nath.

"The government does not comment on the views and opinions of former RBI governors and economists on demonetisation and GST expressed before media/private agency etc," Jaitley said in a written reply to the House.

The government, the reply said, has from time to time stated advantages to the Indian economy which accrued due to the note ban and Goods and Services Tax (GST).

The two senior Congress leaders had asked whether a former Governor of Reserve Bank of India and several renowned economists have recently stated that ban on high value currency notes in 2016 and rollout of GST in July 2017 have caused 'really hard blows' to the economy.

Jaitley further said after the structural reform of GST had been introduced in a record time, the economic growth bounced back vigorously.

Robust growth rate of 18 per cent for 2017-18 in net direct tax collections, the highest in last seven financial years, is "indicative of the positive impact" of demonetisation on the level of tax compliance in the country.

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