It shows that black money is not hoarded in the form of high denomination notes but is invested in real estate or business. The absurdity of this argument now stands exposed. The central bank also said slightly more than 1 per cent notes were not returned, and nearly 99 per cent currency came back.
It pointed out 158 per cent increase in the number of searches (from 447 to 1152 groups), 106 per cent increase in seizures (from Rs 712 crore to Rs.1469 crore) and 38 per cent increase in admission of undisclosed income (from Rs 11,226 crore to Rs 1,54,96 crore). RBI documents show that there had been a fall in fake Rs 100 notes but an increase was noted in the Rs 1,000 notes. The dividend of the RBI to the government has fallen from Rs.65876 crore, in 16-17 to Rs.30,659 crore, a whooping drop of Rs.35215 crore. "Shame on RBI which recommended demonetisation", Chidambaram tweeted.
An enormous shock was thus administered to the economy for no rhyme or reason.
Even though the Reserve Bank of India officials are yet to make a statement but the data released by the Reserve Bank of India is good enough for a common man without much financial knowledge to interpret it. "RBI's report yesterday, has exposed the falsehood that was sold to the country".
Thanks to demonetisation, he continued, "no one is allowed to cheat in the country any more, everyone is answerable".
The senior Congress leader wondered what the note ban decision had achieved as 99 per cent of the money had been returned, and accused the prime minister of "changing the narrative" on the issue repeatedly.
Expectations of various quarters that sizable portion of the demonetised currency won't return has not been fulfilled.
Indeed, "the fact that the entire demonetized money has come back shows black money has been accounted for completely". Due to acute scarcity of new bank notes, many farmers had insufficient cash to purchase seeds, fertilizers and pesticides needed for plantation of rabi crops which are sown around mid-November.
Indian Prime Minister Narendra Modi is under attack for implementing intricate tax reforms immediately after the drastic measure of flushing out old currency notes from the economy. Neither of these conditions holds. But we are yet to see how many rich black money horaders are behind bars. (This is obviously untrue, for when a black money operator buys an air-ticket for himself, he does not pay for it with a wad of currency notes; but let that pass). It saw it as a fight against black money and there were indications that a lot of the notes will not return as they are unaccounted cash and that would create a windfall for the RBI and the government. The object of demonetisation was that India is predominantly a high-cash economy and, therefore, that scenario requires to be significantly altered.
"It's nobody's case that black money has been completely eliminated after demonetisation..." And such a shortage, by the government's own Economic Survey, does not exist. "Only the Economy suffered due to this massive folly!" Both in terms of the number of transactions, and its value. He said about demonetisation then, "During this drive against black money, the government has established a big set-up for mining the data on money deposited in banks".
Jaitley underscored on Thursday that one of the objectives of demonetisation was also to check circulation of counterfeit currency. This latter effect would be recessionary for the economy as a whole.