This means one billion unique Aadhaar numbers, linked to one billion bank accounts and one billion mobiles. The target follows the success of demonetisation in bringing about a substantial Rs 6 Lakh Crore reduction in value of high value notes that would have been in circulation and a rising trend of bank accounts and digital payments, said official sources.
There is confidence in government circles that the “1 plus 1 plus 1” figure will happen soon – though no target dates are spelt out – and this will mark a big step towards expanding the financial and digital mainstream.
According to official statistics, estimated high value notes at the end of September, 2017, add up to approximately Rs 12 lakh crore as against a value of Rs 15.44 crore in November, 2016 when PM Narendra Modi announced demonetisation. “The number has more or less stabilised now,” said a source.
The rate at which specified bank notes were growing meant they would have been of the order of around Rs 18 lakh crore and they have been effectively brought down by Rs 6 lakh crore. “There is no shortage of currency of high value or other notes. This reduction eliminates the potential to store this amount as black money,” said a source.
The Modi government finds positive references to politically contested measures like demonetisation, GST and Aadhaar as particularly gratifying as it has waged a bitter battle over these programmes with its policy critics and the opposition. The improved rating, which was shared with the government a day before release, sees these steps as serious attempts to formalise the economy and make it more transparent.
The government has sought to counter attacks that the return of 99% of denotified currency, despite being contrary to what was initially anticipated, does not signal a failure of demonetisation.
If this was the only objective, said sources, the government would not have offered several windows to exchange old notes. The sharp reduction in the number of high-value notes is seen as a significant step towards a less cash economy promised by the government and, coupled with measures such as limits on such payments for property purchases, is expected to accelerate the process.
Despite criticism against the rollout of GST, the tax reform has received widespread approval even from economists who were doubtful of note ban. The fillip to digitalisation, read in conjunction with Aadhaar and measures like BHIM-UPI, is also being recognised by ratings agencies, and the reduced transaction costs are also making a difference, said sources.
The UID schemes and its linkage with welfare payments as well as PAN cards and other use by private firms have been criticised for exclusion as well as intrusion of privacy. The thumbs up to UID as a means of quickly establishing identity of a beneficiary or payment maker is a shot in the arm for the government.
Source : timesofindia