Mangaluru : Union Minister of State for Commerce and Industry Nirmala Sitharaman on Thursday strongly defended the demonetisation exercise launched by Prime Minister Narendra Modi with the sole intention of curbing black money.

Participating in a talk on demonetisation organised by the district BJP unit, Nirmala, who also holds the additional charge as state minister for finance and corporate affairs, called it as a failure on the part of erstwhile Congress-led United Progressive Alliance (UPA) in the past, in taking such a bold step to weed out black money.

The Supreme Court had directed the then Union government to form a special investigation team (SIT) to probe into black money. But it was BJP that formed SIT, the minister said pointing at Congress Vice-president Rahul Gandhi, without taking his name.

Putting the ball in Congress’ court, she said, “A white paper on black money released by the Department of Revenue in the year 2012 (when Congress was in power) stated that the black money had increased from 15% to 18% of gross domestic product (GDP) to 19% to 21% till 1984. While another report by VISA indicated that each transaction had direct corelation with shadow economy up to 26%. Most importantly, 86% of total cash circulated were in the denominations of Rs 500 and Rs 1,000,” Nirmala said underlining the cause of scrapping of high denomination notes.

She said there were several reports earlier which substantiated the extent of cash transactions going unnoticed succinctly evading tax net. In a joint study by a US-based firm and National Institute of Banking Management, Pune, in 2014, it has emerged that 87% of transactions were on the basis of cash. It again underlined the pace of taking corrective steps to scrap the notes in circulation and promote digital banking to check the scourge of black money, she said.