Successful demonetisation will help raise revenue in the long run: World Bank

Smooth GST implementation will be another major complementary reform to promote formalization of the Indian Economy triggered by demonetisation. Photo: Pradeep Gaur/Mint

Smooth GST implementation will be another major complementary reform to promote formalization of the Indian Economy triggered by demonetisation. Photo: Pradeep Gaur/Mint

NEW DELHI: Successful demonetisation will help in raising revenues on sustained basis as more and more people will come under the tax net, says a World Bank report.

During 2016-17, India generated additional tax revenues as unreported cash identified both through the amnesty scheme and demonetisation were brought under the tax net. Gross tax revenue, including states’ share, surpassed budgeted target (of 10.8%) at 11.3%, which was mostly due to higher-than-expected excise collections on petroleum products. Even though, demonetisation had only a neutral effect on direct taxes, which fell within the budgeted target of 5.6% of the gross domestic product (GDP), it said.

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Credit: livemint.com