Two years after the launch of demonetisation, the national auditor is likely to table a report that analyses the impact of the move in the budget session of parliament, government officials privy to the development told CNBC-TV18.
On May 17, 2017, the Comptroller and Auditor General (CAG) had called a meeting “to discuss audit issues arising from the demonetisation exercise” and asked various offices of government and CAG to submit their views by August 10, 2018.
For the report, the auditor has sought the impact on expenditure made by the government to provide relief during demonetisation; GDP estimation and contraction/expansion of union government spending; suspicious banking transactions post demonetisation; voluntary income disclosure scheme (VDIS) 2016 and Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS) 2016, said the officials. They asked not to be named.
Further, CAG has asked for additional expenses incurred by commercial banks with regard to expenses incurred on return of old currency, distribution of new currency, overtime payments to staff, recalibration of ATMs, etc.
In November 2016, Prime Minister Narendra Modi announced the shock move to ban high-value notes to flush out money hidden from tax authorities. The government withdrew 500 and 1,000 rupee notes.
Opinion is divided over the success of the move aimed to bring thousands of crores worth of cash in unaccounted wealth into the mainstream economy. The government maintains that demonetisation was a success while opposition Congress party has said it was a failure.
With regard to efficiency of the printing exercise, the CAG sought details of additional expenditure on account of cost of printing new currency notes by Security Printing & Minting Corporation of India Limited (SPMCIL), Bharatiya Reserve Bank Note Mudran (BRBNMPL) and Bank Note Paper Mill India Private Limited (BNPM).
In the insurance sector, the auditor has asked for the impact of incentives provided for digital transactions discounts on premium and grace periods, post demonetisation and for the petroleum companies, “It appears that an amount of Rs 351 crore may have been incurred or borne by public sector oil marketing companies on account of discounts extended to customers.”
Coming to infrastructure, “Rs 936 crore worked out on account of compensation due to National Highways Authority of India (NHAI) concessionaires”, according to CAG.
The national auditor has sought details of implementation of various schemes launched by National Payment Corporation of India (NPCI), on account of incentivising digital transactions; the impact on IRCTC related to the waiver of service charges and on the indirect tax collections of the various states and union territories.
The CAG is currently understood to be compiling comments on these aspects collected by its various offices, said the officials familiar with the matter.