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Any Black Money Recovered Under ‘Operation Clean Money’ Launched by Modi Govt After Demonetisation? No Idea, Says IT Dept

Strap: Operation Clean Money was launched in January 2017 to bring black money into books.

The Income Tax department’s reply to an RTI application on February 28 has reportedly revealed that the government has no evidence of black money recovered under ‘Operation Clean Money’ launched by the Narendra Modi-led Bharatiya Janata Party (BJP) government after demonetisation.

Activist Prasenjit Bose had submitted the RTI queries to the Directorate of Income Tax, regarding the recovery of unaccounted wealth or black money. Per a report in the Huffington Post, the IT department provided the number of two kinds of PANs (Permanent Account Numbers): 23.48 lakh PANs identified for “online verification” of cash deposits as their “tax profiles were found to be inconsistent with the cash deposits made during the demonetisation period”, out of which 11.47 lakh PAN holders have submitted responses till 15 February 2019; and PAN; and 3.04 PAN holders who were sent notices for not filing income-tax returns for the assessment year 2017-18. Out of this, 2.3 lakh PAN holders have filed e-returns.

However, the IT department failed to state the amount of any actual black money recovered from the bank accounts after such scrutiny.  The RTI response said, “As on date, various proceedings initiated under relevant sections of the Income-Tax Act in such cases are pending… details/statistics of unexplained cash detected and… amounts recovered… are not available…,” reported Huffpost.

Furthermore, the report stated that post-demonetisation, despite prima facie evidence of money laundering through the Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts, the income-tax department has not taken any effective action.

Also Read: Minutes of Meeting Reveal: RBI Told Modi Govt Black Money Held in Gold & Real Estate, Not in Cash

On 29 November 2016, the RBI had imposed restrictions on withdrawal of money from PMJDY accounts, after the steep rise in deposits in such accounts post-demonetisation. “With a view to protect the innocent farmers and rural account holders of PMJDY from activities of money launders and legal consequences under the Benami Property Transaction & Money Laundering laws, it has been decided to place certain limits, as a matter of precaution, on the operations in the PMJDY accounts funded through deposits of Specified Bank Notes (SBNs) after November 09, 2016,” the central bank had said in its circular. 

But surprisingly, the government has taken no action against such deposits. In the RTI reply, the IT Department reportedly stated, “There is no flag received in the accounts reported to ITD which identifies with PMJDY.”

The HuffPost report added that the increase in the recovery of illegal assets through conventional IT raids after demonetisation is too small to justify a drastic step like scrapping 86% of the economy’s currency.

As reported earlier, the RBI had warned the Modi government that most of the black money in the economy was held in cash and gold, and not in currency form. In August 2019, the RBI had said that 99.3% of the demonetised notes had come back into the system.

Additionally, per Huffpost, going by annual data on IT raids, the seizure of unaccounted wealth rose marginally from Rs. 1,437 crore in the two years before demonetisation (2014-16) to Rs 2,461 crore in 2016-18. This recovery of was possible without the shock of demonetisation.

Also Read: Demonetisation Killed The Informal Sector, 10-12 Million Jobs Were Lost: Raghuram Rajan in new Freakonomics Podcast

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