New Delhi, November 8: Completing two years of demonetization, the impact has been seen as a key step in a chain of important decisions taken by the Government to formalise the economy. The seeds of demonetization sown has reaped a beneficial rise in the Indian economy. The government has first targeted the black money outside India, the culprits were slated under the Black Money Act.
Two years ago, the demonetization fervor had taken the nation in complete astonishment making the people think about the outcome. Well, the decision had been criticized to quite a large extend but now, when we see the impact, it has given a reason for all to smile and praise the historic decision. As we complete 2 years of demonetisation today, it has been established that the government has undoubtedly given justice to the hard workers by dragging out the offenders and fraudulents.
Informing about the impact of the historic demonetization, Finance Minister Arun Jaitley highlighted the important facts in his FB post. He stated that the Government first targeted the black money outside India. Asset holders were asked to bring it back on payment of penal tax, on failure to do so they are being prosecuted under the Black Money Act. All such details received have resulted in action against the violators.
Impact on Income Tax:
The impact of demonetization has been felt on collection of personal income tax. Its collections were higher in Financial Year 2018-19 (till 31-10-2018) compared to the previous year by 20.2%. Even in the corporate tax the collections are 19.5% higher. In May, 2014, when the present Government was elected the total number of the filers of income tax returns was 3.8 crore. In the first four years of this Government, it has increased to 6.86 crore.
Digital Transactions implementing GST regime:
Demonetisation & implementation of the GST curbed cash transactions in a big way. With a visible increase in the digital transactions, formalisation of the economy has led to increase in the tax payer base from 6.4 million in the pre-GST regime to 12 million. Despite an annual income tax relief of Rs. 97,000 Crore given to the smaller tax payers and a Rs. 80,000 Crore relief given to the GST assesses, tax collections have gone up. Rates of taxes, both direct and indirect have been reduced, but tax collections have gone up.
Government has used these resources for better infrastructure creation, social sector and Rural India. How else could we visualise villages being connected by Road, electricity in every home, 92% coverage for rural sanitation, a successful Awas Yojana, a cooking gas connection.It is the formalisation of the economy which has led to 13 crore entrepreneurs getting Mudra Loans. More formalisation, more revenue, more resources for the poor, better Infrastructure, and a better quality of life for our citizens.