Demonetisation behind the buoyancy in tax collections, says RBI MPC member

RBI Monetary Policy Committee (MPC) member Ashima Goyal has attributed the rise in tax collections to demonetisation and said that it will help the nation move towards the ideal situation where low taxes are levied on a large base.

On November 8, 2016, Prime Minister Narendra Modi announced the demonetisation of old Rs 1,000 and Rs 500 banknotes and one of the key objectives of the unprecedented decision was to curb black money flows and promote digital payments.

Noting that demonetisation had short-term costs but some long-term benefits, Goyal said it enhanced digitisation and formalization in the economy and reduced tax evasion, although all this has further to go.

“It contributed to the buoyancy in taxes the country is benefitting from today. This helps us move towards the ideal of low tax rates on a large base,” she told

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