NEW DELHI: RBI Monetary Policy Committee (MPC) member, Ashima Goyal, said that the demonetization undertaken during the Narendra Modi government’s first tenure yielded higher tax revenue for the country. This resulted in economic growth.

The Central Government banned Rs.1000 and Rs.500 currency notes on 8th November 2016 to tackle black money and to encourage digital transactions. The unexpected move raised huge criticisms against the government’s decision. Moreover, the former RBI Governor, Raghuram Rajan, had also criticized the demonetization drive of the government.

Ashima Goyal said that even though the demonetization brought difficulties in the short term when examined from a long-term perspective, the move had been advantageous to the country. The central financial department’s report that was published on 9 October points out that in this financial year the tax revenue rose by 24%. Goyal said that this rise in tax revenue must be seen as a result of a decrease in tax evasion brought about by demonetization.

The Central Government raked in Rs.8.98 lakh crores in tax revenues in the current fiscal.