The Modi government on Thursday admitted that its ambitious amnesty scheme – Pradhan Mantri Garib Kalyan Yojana (PMGKY) – had received a poor response, with disclosures of only Rs 5,000 crore in unaccounted income.
However, Finance Minister Arun Jaitley said the PMGKY response should not be seen in isolation as it was introduced after the Income Disclosure Scheme (IDS) and demonetisation exercise were carried out in the previous fiscal.
“The response to PMGKY has not been so good... about Rs 5,000 crore of income was declared in PMGKY,” Revenue Secretary Hasmukh Adhia told reporters here.
Adhia said one of the reasons for this was that even before the scheme was announced, people had tried to deposit their cash in different bank accounts to adjust undeclared wealth.
“The rate of interest, which has been fixed (50+25%), was a deposit to be kept for a period of four years without any interest. So, people found 75% of their money blocked,” he said.
Chance for tax evaders
The government had introduced PMGKY last year to give tax evaders a chance to declare their undeclared income after the scrapping of Rs 500 and Rs 1,000 notes.
Under the scheme, taxpayers could get away by paying a tax and penalty of nearly 50%. The declarant would also have to put 25% of the undisclosed income in zero-interest deposits with a lock-in period of four years.
Jaitley insisted that PMGKY was preceded by similar schemes, and the response should not be seen in isolation.
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