Finance Minister Arun Jaitley in his blog on Facebook has revealed that the centre's aim on November 8 2016 was not to confiscate cash.
The finance minister who has received serious criticism after an RBI report said 99.3% of the banned cash had returned, wrote "an ill-informed criticism of the demonetisation is that almost the entire cash money got deposited in the banks. Confiscation of currency was not an objective of demonetisation. Getting it into the formal economy and making the holders pay tax was the broader objective."
Jaitley had posted the blog on the anniversary of demonetisation. He said that the economic policy of the government was a "key step in the chain of important decisions taken by the government to formalize economy".
"By the time the first five years of this government are over, we will be close to doubling the assessee base," the senior minister wrote in the post titled "Impact of Demonetisation".
Arun Jaitley said the notes ban had helped tackle tax evasion and the extra resources from increased tax collection had been used in infrastructure, social sector and villages. "More formalisation, more revenue, more resources for the poor, better Infrastructure, and a better quality of life for our citizens," he said.
"The system required to be shaken in order to make India move from cash to digital transactions. This would obviously have an impact on higher tax revenue and a higher tax base."
"The enormity of cash deposited and identified with the owner resulted in suspected 17.42 lakh account holders from whom the response has been received online through non-invasive method," he shared. The violators faced action, larger deposits helped the lending capacity of banks and a lot of money was diverted to mutual funds.
Digital transactions had increased, he said, adding that Visa and Mastercard were losing market share in India to indigenously developed UPI and RuPay card.
Jaitley added that demonetisation, along with GST or Goods and Services Tax had curbed cash transactions in a big way. "An increase in the digital transactions is visible. This formalisation of the economy has led to the tax payer base increase from 6.4 million in the pre-GST regime to 12 million tax payers in the post-GST regime."