Flood of cash swamps I-T, overstretched taxmen hunt for signs of evasion

The front line in India’s war on cash is advancing. After people rushed to redeem cancelled currency at banks, authorities are now scrutinising the paper trail for signs of tax evasion—and chasing suspects.

But “Operation Clean Money” is proving an arduous task for a government that struggles, even in ordinary times, to collect what its citizens owe.

“We are not doing 100%. We can’t,” said an official with India’s income-tax department. “We don’t have the resources to look at each and every deposit” that is flagged for investigation.

Prime Minister Narendra Modi sprang the cash plan in November, invalidating 86%