07/23/2017: The Government of India told the Supreme Court that it unearthed undisclosed income worth INR 719.41 billion. The government also added that it was for the three years from 2014-15 to 2016-17. But did demonetization really help the government achieve its aim?
The center’s own data suggests demonetization didn’t help unearth black money. Or at least, not a proportion of the undisclosed income that authorities uncovered during the 3 years from 2014-15 to 2016-17. The government said they extracted the undisclosed income with income tax (IT) raids, searches & seizures.
The government also added before the apex court that immediately after demonetization, the IT department undertook a lot of enforcement operations. They included 1,100 searches/surveys and more than 5,100 verification’s. The total seizures amounted to INR 6.1 billion including cash worth INR 5.13 billion. In addition, cash seizures in new currency amounted to INR 1.1 billion. And the total undisclosed income admitted was more than INR 54 billion. This coincides with the statement the government made before the Lok Sabha on 02/03/2017.
In other words, the total amount of valuables seized was a mere 970 million. Furthermore, data suggests that for 100 tons of gold smuggled into India each year, the government seized only 0.003%.
Ultimately this suggests that demonetization accounted for seizures that were much smaller compared to seizures outside the period. In other words, the people endured unnecessary pain. Furthermore, even if we deduce 54 billion from the government’s claimed 719.41 billion, the seizures outside demonetization are multitudes bigger.