The government’s attempts to reduce the CIC-GDP ratio by merely reducing currency in circulation without the necessary structural reforms are likely to have deleterious consequences.
Year-to-year growth of tax payers in 2016-17 was 26% (with demonetisation), which is less than 27.6% during 2015-16 (without demonetisation).
Instead of waiting for all the data to come in and making an apples-with-apples comparison, are different numbers being thrown at the public in order to make a political point about the ‘success’ of demonetisation?
Despite government press releases, demonetisation doesn’t appear to have spurred a substantial increase in number of new tax payers or direct tax collection.
While it may have boosted certain modes of digital transactions, these are still just a drop in the bucket when compared to ground realities and the larger sea of retail payments.
With all the detected duplicate PAN cards being deactivated and there being only 645 fake PAN cards, why is the government pushing for drastic changes to India’s income tax structure?