New Delhi: Union finance minister Arun Jaitley on Monday flaunted double digit growth in indirect tax collection in December to claim that Narendra Modi’s move to demonetise Rs 500 and Rs 1,000 currency notes had little impact on economic activity.
However, former PM Manmohan Singh debunked government claim and said that demonetisation will have a “very significant adverse effect” on the country’s GDP and will be an issue in the upcoming assembly elections in five states.
Mr Jaitley, in a press conference said indirect tax receipts grew by an annual 14.2 per cent in December, helped by a surge in excise, reflecting an uptick in manufacturing.
In December which saw cash crunch and long lines outside banks and ATMs, following note ban saw Central excise collections grow at 31.6 per cent (a reflection on manufacturing activity), while service tax was up by 12.4 per cent.
Customs mop up, however, witnessed 6.3 per cent decline, which Mr Jaitley said was mainly on account of dip in gold imports.
After note ban many experts had warned of job losses and slowdown in economic activity. Finance minister dismissed these concerns as unfounded. “All the stories about job losses or businesses suffering losses are anecdotal. The growth figure does not depend on anecdotal basis.
“Statistics and taxation figures are real. This is the money which has come in,” he said. “This data is real.” Mr Jaitley said that when compared with tax collections in November, indirect tax receipts in December were up 12.8 per cent. “Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,” the finance minister said.
Tax collection in December 2016 has also moved up compared to December 2015 and November 2016. Meanwhile Dr Manmohan Singh, after releasing the Congress manifesto for Punjab polls said that note ban will have a “very significant adverse effect” on the country's GDP.
