The much-hyped Demonetization which was earlier anticipated to bring trillions of rupees of fiscal and tax gains just resulted in peanuts says Motilal Oswal, a domestic Brokerage firm. The report says the Government may gain only Rs 72,800 crore from the move – taxes, penalties worth Rs 32,800 crore and Rs 40,000 crore by way of surplus transfer from the RBI.
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Many economists and analysts in the early days of Demonetization claimed that at least 20 percent of the Rs 15.55 trillion of canceled money would not come back to the system, which in turn, could enable the RBI to write off that amount from its balance sheet. And that would be transferred to the Government.
There are even some reports that with such huge monetary gains, the government may pass on the benefit to the poor which will result in boosting of its pro-poor image. But then this estimations if true will be nothing when compared to the incomes losses the government has suffered due to cash crunch.
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