War rages on stash data

New Delhi: Even as the Opposition has questioned Prime Minister Narendra Modi on the "contrary stands" being taken by him and the Reserve Bank of India (RBI) on the total amount of additional and black money that came back into the banking system after demonetisation, Union Finance Minister Arun Jaitley said there was no confusion in figures given by the Prime Minister in a bid to silence critics.

Congress leader Ghulam Nabi Azad on Wednesday questioned why "there are contrary stands by PM and RBI. While he (Modi) announced that additional Rs 3 lakh crore had been brought into the banking system after demonetisation besides recovering Rs 1,25,000 crore black money, the RBI says that they do not know how much money has come back and how much fake money is there since the counting of the money is still in progress." Azad asked how can Modi make this announcement while the counting of the money is in progress. "Is he not befooling the people of the country," he asked.

Azad also attacked Modi for not sharing this information in Parliament when the opposition asked for it. "There is a huge question both PM and RBI should answer to the country as who is correct and who is lying," he added.

However, Arun Jaitley has said the Prime Minister isn't "writing any article that he will disclose sources," adding, "there isn't any confusion in numbers... there are revenue figures and there are potential revenue gain figures based on internal investigations, notices, responses of the revenue department and CBDT or Central Board of Direct Taxes. It doesn't depend on an RBI report."

"The real source is how much money is being deposited? How much of it is unexplained? How many people have deposits which are disproportionate to their sources of income? How many people have been given notices? What is the quantum covered by those notices? The determination of the estimated figure is on that basis," Jaitley told media persons here.

Modi said more than Rs 1.75 lakh crore deposited in banks was under the scanner and black money of Rs 2 lakh crore was forced to be deposited in banks.

He said the number of new taxpayers filing income tax returns from April 1 to August 5 had gone up by 34 lakh. The Prime Minister said over 18 lakh people have been identified whose actual income was much higher than the declared one and around 4.5 lakh persons were trying to tread the right path after accepting their mistakes.

Modi said one lakh people, who had neither heard of income tax nor paid the tax, have now been forced to do so.
A written reply tabled in Parliament by the Finance Ministry earlier this month on how much suspicious income was detected after demonetisation puts the total value of seizures and undisclosed income at Rs 18,529 crore.

This - so far, the latest official figure on unaccounted money seized post the notes ban - is nowhere near the figure mentioned by the Prime Minister in his speech.

Sources at the RBI said the Prime Minister may have referred to a report by some of its economists. "Excess deposits accrued to the banking system due to demonetisation are estimated in the range of Rs 2.8-4.3 trillion (Rs 2.8 lakh crore-4.3 lakh crore)," says the report, which was posted on the RBI website on August 11 with a disclaimer from the Central Bank saying that these are not its official views and that it is merely a study report.
The report says, "Overall, there appears to have been a significant increase in bank deposits due to demonetisation."

It does not say anything about unaccounted wealth or black money collected or deposited post demonetisation.
It only analyses the pattern of deposits made after November 8, 2016, the day Rs 1,000 and Rs 500 notes were abruptly banned, and talks about excess deposits in banks across certain accounts.

A senior economist who did not want to be identified, said, "The question that the paper (study) addresses is the wrong question if we want to know how much black money held in old notes was immobilised or caught. The paper's answer therefore does not even address the black money issue, which was the major objective of demonetisation.

Nobody ever disagreed with the expectation that demonetisation will have an immediate positive effect on deposit growth - that is expected. But the question is: how much of the old notes have been exchanged for either new notes or additional deposits after demonetisation."