But in its annual report released on Wednesday, the Reserve Bank of India (RBI) said 15.28 trillion rupees' worth of 500 and 1,000-rupee banknotes - out of a total circulating value of 15.44 trillion rupees - had flowed back into bank accounts.
After the note ban, old notes were allowed to be deposited in banks, with unusual deposits coming under income tax scrutiny. After 10 months of demonetization, it is the first time that the RBI has issued the figures.
296 days after that shocking speech by Prime Minister Narendra Modi on November 8, 2016, the RBI has finally said what we all knew- demonetisation has not quite proved to be the magic potion that the Modi government had hoped it would be to nail corruption and black money. He further accused demonetization of being a scheme that helped turn black money into white. "Was demonetisation a scheme created to convert black money into white?" he tweeted. The economy that was cruising at 7.5 percent growth rate has sunk to 5.6 percent, which means a precipitous fall of Rs 3 lakh crores. "Will the Prime Minister own up", he asked in the tweet.
Following the publication of demonetization report by Reserve Bank of India, a lot of varied interpretations have been made across the nation. No matter what the big claims were being made about it, nothing happened.
After the GDP figures were out, twitterati were quick to recall what Singh had said and how his prophecy has come true to the horror of all. While the opposition is attacking the Modi-led NDA government and the government is defending itself completely and everyone is busy giving their arguments. It was believed that the amount of currency which did not get back to the banking system may be termed as black money.
The Congress today said Prime Minister Narendra Modi should apologise for demonetisation, describing it as the country's "biggest scam" which had inflicted "misery" on the people and dealt a "body blow" to the economy.
However, while briefing the press on demonetisation data, Finance Minister Arun Jaitley defended the move, saying the impact of the note cancellation move had been "extremely positive" in multiple areas. He called the note ban move a total failure.
The AAP leader questioned whether the extra money was black money or fake notes deposited by people close to the Bharatiya Janata Party. It is now up to the tax department to do its job, he added.
Also read:SBI, HDFC Chairman disappointed with RBI policy say it will derail economy. In such a situation, when money comes into the system, it does not become legitimate money, he added. After review, he said, it may well transpire that taxes had already been paid upon these deposits, or that the money was not liable to be taxed at all.
"The fact that bulk of SBNs have come back to the banking system shows that the banking system and the RBI were able to effectively respond to the challenge of collecting such a large number of SBNs in a limited time". An upward trend was also noticed in March again part due to year-end investments and tax payments by individuals. "There is no evidence to suggest that there is sharp rise in non-cash transaction". The effect of the ban on bondage is on the right track.
During the meeting, the Prime Minister also asked the ministers to spread the message of the government about work done for the benefit of weaker sections of the society especially the OBCs.