India to report GDP growth accelerating as economy stabilises

India to report GDP growth accelerating as economy stabilises

India to report GDP growth accelerating as economy stabilises

We can not be certain if indeed the note-ban troubled the black money riches against whom it was devised, but we know for sure that common people went through hell (sometimes, even death) and may still fall victim to the risk of "inspector raj" as government will try to push up its tax collections by all means. This is an opportune time to reflect on what Modi's predecessor Manmohan Singh thought about demonetisation in Parliament and how he stands vindicated today. There can be just two things, either they helped people to convert black money into white and if that's true, then this is the biggest scam of the century. "The objective was formalisation of the economy, attack on black money, making the system less dependent on cash, blow to terrorism.Each of these areas have received extremely positive effect due to demonetisation", Jaitley told reporters after the RBI's annual report was released.

Previous year on November 8, the government has banned old Rs 500 and 1000 notes in an attempt to remove black money in the country. The total currency in circulation of all denominations as on 8th November, 2016 was 17.77 lakh crore whereas total currency in circulation as on 4th August, 2017 was 14.75 lakh crore.

Demonetisation caused India's Gross Domestic Product (GDP) growth to drop 1 percentage point (pp) to 6.1 percent in the January-March 2017 period, against the Central Statistics Office's estimate of 7.1 percent.

"As the demonetisation progressed and the monies were deposited, it was quite clear that people found ways and means, legitimately or otherwise, to get the money into the banking system irrespective of the consequences they will face later". The government had initially estimated about Rs5 trillion wouldn't be declared following the sudden move on 9 November, indicating that this was cash stashed away illegally to avoid tax.

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The AAP leader questioned whether the extra money was black money or fake notes deposited by people close to the Bharatiya Janata Party.

He wrote, '99% notes legally exchanged! 99% of the demonetized currency has come back to the RBI.

Accusing Modi of obfuscation, he said figures given by RBI had "again exposed" the government, and the "demonetisation scam" had "not only dented institutional sanctity of RBI, but also credibility of India abroad". He even questioned the Narendra Modi government whether its demonetisation decision was created to convert black money into white.

Though the exact cost-benefit analysis is yet to be made, it remains to be seen how the government lays out the long-term benefits of demonetisation in the years to come. Whether this pain of the common man will work to the benefit of the economy is yet to be ascertained as what is being looked at now are the short term gains, which are less than ten months from the date the government scrapped the notes, and these don't appear to give a positive view of the demonetisation move. "Demonetisation was supposedly done to uncover several lakhs of crores of black money".

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