A high-level internal assessment report on the government's drive to clean black money, revealed that Narendra Modi's demonetisation move gave the Indian economy a profit of £50 billion. The report also said that at the time when Narendra Modi announced demonetisation on November 8, last year, currency worth £177.7 billion was in circulation in the economy.
However, as per an RBI figure, at the end of April this year, the total amount of currency in circulation was £142 billion, meaning the Indian economy has £50 billion less than what it would have had if the decision to annul approximately 86 per cent of India's currency hadn't been taken. The report also cited other benefits including widening of the tax base, boost to digital economy, growing bank deposits, burgeoning EPFs and strengthening of the teetering housing sector.
India's net personal income tax revenue is expected to double over the next couple of years, according to the report. Number of people who have filed self assessment forms for the financial year 2016-17 grew by 23.8 per cent. At least 10 per cent of this growth is due to demonetisation. In the last financial year, 9100,000 new assesses joined the tax base. Also, demonetisation has made India more digital. Financial year 2016-17 saw a total of 30 million digital transactions. The government believes that if this continues, there will be more than 250 million digital transactions this financial year. There has been a considerable usage of mobile wallets such as PayTM, SBI Buddy, FreeCharge, with the usage of these being over £20 million per day.
