CAG to undertake audit of demonetisation fallout

Saturday 11th March 2017 07:31 EST

The Comptroller and Auditor General of India will soon launch an audit of different aspects on demonetisation announced by Prime Minister Narendra Modi. CAG Shashi Kant Sharma said, "Demonetisation per se is a banking and money supply issue and as such, outside the CAG's audit jurisdiction. But the CAG is well within its rights to seek audit of fiscal impact of demonetisation, largely its impact on tax revenue. That way the issue gets linked with the public exchequer."

Sharma pointed out that there are other linkages of demonetisation with the public exchequer that will also be covered by the audit. This would be "expenditure on printing of notes, RBI dividend to the Consolidated Fund, etc." He also said that the massive amount of data generated by banks and the Income-Tax Department in the wake of demonetisation would also be covered.

"This banking transaction data and the follow-up by the Revenue Department can also be subjected to CAG audit. Audit can look into various risks, such as errors and omissions in identifying the potential tax evaders, failures to pursue the identified suspects, selective and arbitrary pursuance of leads and consequences thereof. Many of these issues will be covered in our audits which we propose to take up in the coming days."

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