One of the aims of notes ban was said to be to reduce the amount of cash in circulation. (File)
Even as the Reserve Bank of India’s latest figures suggest that more than 99 per cent of the demonetised currency came back to the system, NITI Aayog Vice Chairman Rajiv Kumar insisted that the scheme was not a failure, and that he supported it on “moral grounds.”
Talking to NDTV, he said that he had backed the move from 2007-08, as a means to ‘drain the swamp’.
“It (the ban) was needed to reintroduce probity, integrity in our social and economic system,” he said.
When asked for proof that the ban had reduced corruption, he said 18 lakh bank accounts were now under scrutiny for receiving unusual deposits after the ban, of which 9.4 lakh accounts are considered suspicious.
Another aim of demonetisation was said to be to reduce the amount of cash in circulation.
However, the currency in circulation has now crossed pre-demonetisation levels by close to 8 per cent.
A recent RBI report also finds that household savings in cash is at a seven-year high.
Mr Kumar however called the argument “spurious.”
“When cash in circulation has risen by 8 per cent, economic activity in terms of nominal GDP has risen by 13 per cent, the figure to use is cash to GDP ratio which has come down by 1.2-1.3 per cent ,” he said.
When asked if in hindsight he would recommend the notes ban again, he answered in the affirmative. “I would do it any day to cleanse my economy, to formalise it, (and) to improve tax compliance behaviour,” he said.