Objective of demonetisation was to expand tax base, fight black money: Jaitley

New Delhi: Finance Minister Arun Jaitley on Wednesday said that the objective of note ban was to bring down cash in economy, bring digitisation, expand tax base and fight black money.

However, people with inadequate understanding of how to tackle black money linked note ban with money returned to system. "People who haven't taken a single step against black money haven't understood aim of note ban;deposits in banks don't legitimise it," he said.

Talking about return of 99 percent of junked currency into banking system, Jaitley said that money has now been identified with its owner.

The FM also added that cash squeeze post note ban in Chhattisgarh and J&K is evident in dip in terrorist and separatist activities.

As much as 99 percent of the junked Rs 500 and Rs 1,000 notes have returned to the banking system, RBI said on Wednesday, prompting opposition to question the efficacy of the government's unprecedented note ban decision to curb black money and corruption.

"Note ban was not an exercise to confiscate money; next step will be to cleanse political funding," Jaitley added.

The Reserve Bank, which has so far shied away from disclosing the actual number of junked currency deposited after November 8 last year, said in its Annual Report for 2016-17 that Rs 15.28 lakh crore of the junked currency had come back into the banking system, leaving only Rs 16,050 crore out.

As on November 8, 2016 there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 in circulation, totalling Rs 15.44 lakh crore.

Post-demonetisation RBI spent Rs 7,965 crore in 2016-17 on printing new Rs 500 and Rs 2,000 and other denomination notes, more than double the Rs 3,421 crore spent in the previous year.

With PTI Inputs