Black, White or Grey

Since the November 8 announcement, Indians are reported to have deposited 97% of the demonetised notes

Published 4 years ago on Dec 17, 2016 Read
AP photo/ Rajanish Kakade

After a couple of months since the demonetisation move was implemented, Indians, after waiting in serpentine queues, are reported to have deposited 97% of the Rs.500 and Rs.1,000 bank notes rendered worthless by the Modi government. According to a Bloomberg report, of the Rs.15.3 trillion sucked out of circulation, close to Rs.14.97 trillion has found its way back into the banking system, as of December 30. The government had estimated about Rs.5 trillion to stay undeclared as black money. But with nearly all the money flowing back into the system, the government’s estimate of money made through tax evasion could well end up being overstated. Though Jan Dhan accounts for the poor have seen a spike in deposits to over Rs.75,000 crore they still form a minuscule portion of the currency deposited. What is not helping matters is the RBI's steadfast refusal to share the exact quantum that has been deposited post demonetisation. Whether Modi’s move, that choked a nation, was indeed a masterstroke or a colossal disaster will be evident in the new year.