The larger purpose of demonetisation was to move India from a tax non-compliant society to a compliant one, and invalidation of non-deposited currency was not its only objective, Finance Minister Arun Jaitley said today.
His comments come a day after Reserve Bank of India said that almost all the Rs 500 and Rs 1,000 notes made illegal in November 2016 have returned to the banking system.
Reeling out data on increase in taxpayer base to justify the unprecedented demonetisation which overnight sucked out 86 per cent of the currency in circulation, Jaitley wrote in a Facebook blog that "this necessarily involved the formalisation of the economy and a blow to the black money".
He further said: "Was the invalidation of the Non-deposited currency the only object of demonetisation? Certainly Not."
"When the impact of demonetisation and other steps is analysed, the Income Tax returns have increased by 19 per cent and 25 per cent. This is a phenomenal increase," he said. "The growth of income tax collections in the pre-demonetisation two years was 6.6 per cent and 9 per cent. Post-demonetisation, the collections increased by 15 per cent and 18 per cent in the next two years. The same trend is visible in the third year."