Demonetisation move: gave Rs 5 lakh crore advantage to Indian economy: Report

New Delhi: Prime Minister Narendra Modi on November 8 last year had announced demonetisation of Rs 1,000 and Rs 500 notes in a major assault on black money, fake currency and corruption.

A high-level internal assessment report of the government on the drive has found that the demonetisation move has given the economy a Rs 5 lakh-crore advantage, an India Today report said.

The junked 500 and 1,000 rupee notes, had made up 86.4 percent of the country’s circulating currency.

India Today, which is in possession of the findings, pointed out that currency worth Rs 17.77 lakh crore was in circulation in the economy at the time of crackdown on old currency notes.

Now speculating, had the demonetisation drive not taken place the banknotes in circulation would have reached Rs 19.25 lakh crore by May 2017.

“However, according to RBI figures, at the end of April this year, the total amount of currency in circulation was Rs 14.2 lakh crore,” India Today quoting the report has said.

“This means that the economy now has roughly Rs 5 lakh crore cash less than the amount it would have had if note ban had not happened,” it further added.

Speaking about the various advantages of the demonetisation, the Finance Minister said, it could lead to reduction in interest rates.

As far as inflow from demonetisation is concerned, he said it would come from many sources including higher tax penalty to be levied on unaccounted money.

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Source:Zee news

Demonitisation