Scrapping Rs 500/1000 notes will be a game changer, tax collection will increase: Arun Jaitley

Finance Minister Arun Jaitley said the Indian government is working towards clamping down on black money, adding a step-by-step approach was taken to boost economic growth and launch a crackdown on illicit money.

Addressing a news conference, Jaitley said from constituting of a SIT for black money and demonetisation, the Indian government has been taking measures to embolden the economy and fight black money.

“Prime Minister Narendra Modi’s move to clampdown on black money has been lauded by all. Scrapping of Rs 500/Rs 1000 notes is a great step towards a cashless economy. This will parallel black money economy,” said Jaitley.

He said illegal money stashed abroad will now have to come in the banks and this will result in direct and indirect tax collection.

“Deposits in the banks will increase, banks will have more capital. This one decision will change the course of how people spend and keep their money,” said Jaitley.

Jaitley termed the move as a big stride in expanding the GDP and making it cleaner. “There are going to be multiple benefits. Yes, there will be inconveniences but we are working for a seamless system. We appeal to people to bear minute inconveniences,” he said.

“Arrangements have been made so that banks have enough cash. It will take 2-3 weeks,” said Jaitley.

Meanwhile, Jaitley said not only Centre, state governments will also benefit from this decision.

When asked about how much money would be unearthed, Jaitley said there was no specific amount. “Rs 13 lakh crore were circulating in Rs 500 and Rs 1000 notes. Rest cannot be said now,” he said.

In 1978 also, the government had ended high denomination notes. When asked the black money did not stop and how it will change now, Jaitley said, “There can't be any comparison between demonetisation in 1978 and today because economy wasn't this big then.”