NEW DELHI: Of the Rs 15.4 lakh crore worth of Rs 500 and Rs 1,000 notes that were scrapped as a resulted of PM Narendra Modi’s November 8 declaration, as much as Rs 14 lakh crore has been deposited in banks.
The value of scrapped currency exceeded the government‘s expectation that as much as Rs 3 lakh crore will not be returned as this would be part of black money hoards.
This also means that expectation that RBI will be able to give a substantial dividend to the government will be belied. While the value of deposits indicates that ways were found to deposit unaccounted money, the government expects to gain tax revenues from large deposits above the prescribed Rs 2.5 lakh per individual limit.
The government also sees gains from small savings that were kept in households being deposited in bank accounts that make these funds productive and safe.
The government has announced a scheme that provides for a 50% penalty for voluntary disclosure of deposits in excess of allowed limits with 25% of the funds to be placed in a fund for welfare of the poor for four years.
Officials said the government expected that such diclosures will also add to revenues even as money become available for more productive use, eventually leading to cheaper funds.