Describing the Rs 2.87 trillion surge in bank deposits ahead of demonetisation as a "curious case", SBI's economic research department today attributed it to income disclosure scheme, a seasonal surge and arrears from pay hikes for government employees.
It said on average, deposits have grown by Rs 1 trillion in September over the last three years but a surge of Rs 2.87 trillion in this September, ahead of the move to discontinue the Rs 500 and Rs 1,000 banknotes, made it a "curious case".
The SBI wing attributed Rs 1.56 trillion to "a seasonal increase" given that people save for festivities and weddings which come later, Rs 45,000 crore to award of arrears as per the seventh pay panel recommendation to central government employees and the residual increase of Rs 85,518 crore due to the IDS scheme.
"Given that IDS attracted a penalty of 45 per cent people may have preferred to disclose these as forceful deposits/advance tax payments so as to pay a tax of 30 per cent and not 45 per cent," it said.
To back this point further, it said advance tax collections in September were quite satisfactory even as industrial growth was not so buoyant and there was slowdown in government expenditure.
In 1997 as well, when the government had last launched a similar amnesty scheme, there was increase in "incremental deposits in the terminal month", it said.
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