Demonetisation will help boost revenues in long run: World Bank

Successful demonetisation will help in raising revenues on a sustained basis as more and more people will come under the tax net, says a World Bank report.

In 2016-17, India generated additional tax revenues as unreported cash identified both through the amnesty scheme and demonetisation were brought under the tax net.

Gross tax revenue, including states’ share, surpassed Budgeted target (of 10.8%) at 11.3%, which was mostly due to higher-than-expected excise collections on petroleum products.

“Revenues may increase permanently if demonetisation is successful in raising the amount of income reported to tax authorities,” World Bank said in a chapter titled ‘India’s Great Currency Exchange’ in its latest ‘India Development Update’.