PM Modi’s I-Day Claim Of Black Money Being Unearthed After Demonetisation Contrary To Finance Ministry’s Claims

The Logical Indian Crew

August 17th, 2017 / 7:07 PM

Courtesy: timesofindia | Image credits: hindustantimes, intoday

In his Independence Day speech, Prime Minister Narendra Modi said the following about black/unaccounted money being unearthed after demonetisation:

“According to the research conducted by outside experts, about Rs 3 lakh crore that had never come into the banking system before has been brought into the system after demonetisation. More than Rs 1.75 lakh crore deposited in the banks is under the scanner. Black money worth Rs. 2 lakh crore had to be deposited in the banks and this system has forced them to be accountable.”

The Prime Minister said that, according to research conducted by “outside experts”, about Rs 3 lakh crore that had never come into the banking system before had been brought into it.

PM Modi also said more than Rs 1.75 lakh crore deposited in banks was under the scanner and black money of Rs 2 lakh crore was forced to be deposited in banks.

But PM Modi’s claims on black money are contrary to the statements made by the Finance Ministry on as many as four occasions (explained below) in the past – the latest one being on August 1, only two weeks ago.

On all these occasions, the Finance Ministry told Parliament that it had no record of the amount of black money in India.

As such, the fact that the Prime Minister suddenly knows the amount of black money brought back by demonetisation indicates that the government has come to a conclusion regarding the extent of black money in India. Or it might also mean that PM Modi was merely stating estimates. Either way, there is a need for the government to state clearly and conclusively its progress in probing black money in India.


The PM’s speech stirred controversy, with journalists and the Opposition questioning his sources.

“PM Modi said Rs 3 lakh crore are back in the banking system post-demonetisation. The RBI has not finished counting yet, how did the Prime Minister get this figure?” senior Congress leader Ghulam Nabi Azad asked, as quoted by NDTV.

Defending the Prime Minister’s I-Day claims, Arun Jaitley said the figures on potential revenue gain were based on investigations and notices by the revenue department and Central Board of Direct Taxes and the responses received, adding that it “does not depend on any Reserve Bank of India report”.

“The real source is how much money is being deposited? How much of it is unexplained? How many people have deposits which are disproportionate to their sources of income? How many people have been given notices? What is the quantum covered by those notices? The determination of the estimated figure is on that basis,” Jaitley said, as quoted by Hindustan Times.


These are the four occasions where the Finance Ministry reported no information on the amount of back money in India, in direct contravention to the Prime Minister’s claims:

1) On August 1, Minister of State for Finance Santosh Kumar Gangwar told Parliament that there was “no official estimation of quantum of black money in India.” (Source)


2) On July 21, Finance Minister Arun Jaitley told Parliament that there “no official estimation of quantum of black money stashed by Indians in foreign countries/banks.” (Source)


3) On April 7, Minister of State for Finance Santosh Kumar Gangwar told the Lok Sabha, “There is no official estimation of the amount of black money in form of old Rs. 500 and Rs. 1000 that have not been deposited during the course of the demonetisation drive.” (Source)


4) On March 17, Minister of State for Finance Santosh Kumar Gangwar told the Lok Sabha, “There is no official estimation of percentage of black money held in India in cash.” (Source)


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