India’s high-profile clampdown on money hidden from the taxman has failed, according to the country’s main opposition Congress party leader citing data released this week by the central bank.
Data released on Wednesday by the Reserve Bank of India (RBI) showed that almost the entire amount of withdrawn currency had returned to banks, meaning Modi may have misjudged cash hoarding, Reuters reports.
Modi withdrew 500 and 1,000 rupee notes from circulation two years ago in a bid to bring vast sums of unaccounted wealth into the mainstream economy.
“The PM had promised that black money, terror funding, and fake currency will be eradicated,” Congress chief Rahul Gandhi said at a news conference.
“The RBI annual report proves that all his objectives failed,” said Gandhi, adding he believed the demonetisation was meant to benefit a handful of Modi’s “capitalist friends”.
Congress reportedly flooded its Twitter page with graphics purporting to show that demonetisation had cost India 1.5 million jobs, around 80 billion rupees (£868m, €967m) in printing of new notes and a 1.5% drop in economic growth.
Indian government finance minister Arun Jaitley said demonetisation had helped India to move from a “tax non-compliant society to a tax-compliant society”.
