Remonetisation to expand tax base: FM

Tokyo, May 8 

Finance Minister Arun Jaitley today said remonetisation, following the world’s largest note ban, has been substantially completed and the move will result in expansion of the tax base in the country.

In November 2016, the government junked 500 and 1,000 rupee notes, which made up 86.4 per cent of the country’s circulating currency.

As demonetised currency was allowed to be deposited in bank accounts or exchanged for new currency, the government introduced new 2,000 and 500 rupee notes.

“India was not a tax-compliant society. A very large part of the economy was cash-centric. This problem needed to be addressed. It requires a lot of political courage to resolve the problem,” he said at an Interactive Session on ‘India’s Business Environment: Reforms and Opportunities’ organised by CII, Indian Embassy and Japan Chamber of Commerce here.

He said Prime Minister Narenda Modi on November 8 last year took the unprecedented decision to demonetise the high denomination currency, which was the largest currency replacement anywhere in the world.

“Eighty six per cent of India’s currency was replaced within a matter of few months. The remonetisation got substantially completed,” he said.

The finance minister said  the move brought about a far greater movement towards digitisation. —  PTI