Rajat Sharma

Rahul should realize the positive outcome of demonetization

AKB (1)On Thursday, Congress President addressed a press conference and clubbed demonetization with Rafale deal to allege that these were ‘scams’ meant to favour what he called ‘crony capitalists’ close to Prime Minister Narendra Modi and the BJP. He said, “the intention (behind demonetization) was to help his (Modi’s) 15-20 crony capitalist friends, who have massive non-performing assets, by taking money from common man to fill their pockets.”

Rahul repeated this charge several times during his brief press conference, but he did not name a single “crony capitalist” friend. Nor did he give details of how much money these industrialists got and in what manner. Rahul had been making such allegations several times in the past at his public rallies. It would have been better if as the president of a national political party, he should have given facts, cited logic, to give a sheen to his charges. Nothing of the sort happened.

Contrast this with the blog that Finance Minister Arun Jaitley wrote on demonetization and its impact. Citing facts and figures, Jaitley sought to establish that the main purpose behind demonetization was not to unearth and destroy black money in currency. According to him, just because most of the demonetized currency flowed back into banks does not mean that demonetization has failed. Jaitley believes, the larger purpose of demonetization was to move India from a non-tax compliant society to a tax complaint one. Post-demonetization, he wrote, more than 1.8 million depositors have been identified by the tax department for inquiry. Tax and penalties have been levied on them.

There has been a phenomenal increase, Jaitley wrote, in the number of people who have filed tax returns. From 3.8 crores in March, 2014, the number of tax returns filed in 2017-18 is 6.86 crores. There has been an increase of 19 pc and 25 pc in the number of tax returns filed in the last two years. Advance tax returns filed in the first quarter of this financial year has increased by 44.1 pc. Income Tax collections have increased from Rs 6.38 lakh crores in 2013-14 to Rs 10.02 lakh crores in 2017-18. According to Jaitley, the positive impact of demonetization has been: more money has come into the system, there has been more formalization of the economy, and this has led to higher tax revenue, higher expenditure and higher growth.

As far as the Rafale deal is concerned, I have already written that this is a highly strategic issue. Everybody admits that the Indian Air Force badly requires Rafale aircrafts to enhance its strike capability. It would be better if we avoid unnecessary political shadow boxing on such a sensitive issue. The lesser, the better.

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