Demonetisation: No recovery of fake currency, no info on seizures from terror groups, smugglers, says Finance Ministry

Recovery of counterfeit notes was cited as one of the primary reasons for implementation of demonetisation. However, Finance Ministry has said that no recovery of fake bank notes were made from November 8 to December 30. “No counterfeit currency have been seized by agencies under CBEC (Central Board of Excise and Customs) since 8th November 2016 till 30th December 2016,” the ministry was quoted as saying by The Indian Express. Also, the ministry has no information about any seizure being made from terrorist/smugglers groups. However, the ministry, has claimed a 100 per cent increase in seizure of valuable assets and 51 per cent increase in undisclosed income. However, the groups which were searched also saw a whopping increase of 136 per cent. The ministry has also declared a whopping increase in tax collections since implementations demonetisation.

In its statement, the ministry has reported 12.01 percent rise in the net collection of direct tax, net growth of 24.6 per cent in personal income tax collections and 14.4 per cent rise in advance collection, in comparison with last year’s figures. “CIT (corporate income tax) advance tax is growing at 10.6 per cent while PIT (personal income tax) advance tax has registered a growth of 38.2 per cent,” the ministry told the PAC in response to its queries on demonetisation.

Both RBI and Government had claimed that demonetisation can contain fake Indian Currency Notes financing of terrorism and drug financing. However, in a note given to the Parliament’s Department Related Committee of Finance, RBI has said: “It occurred to Government of India and the Reserve Bank that the introduction of new series of notes could provide a very rare and profound opportunity to tackle all the three problems of counterfeiting, terrorist financing and black money by demonetising the banknotes in high denominations of Rs 500 and Rs 1000 or by withdrawing legal tender status of such banknotes.”

The four secretaries from the ministry — Revenue, Expenditure, Department of Economic Affairs and Department of Financial Services — are expected to appear before the PAC on February 10.