•2. The new normal

In the year 2015-16, 3.7 crore assesses of the total population 

of over 125 crores, filed income tax returns. Out of these, 99 

lakhs declared income below Rs.2.5 lakhs and paid no 

taxes; 1.95 crores declared income less than Rs.5 lakhs; 52 

lakhs declared income between Rs.5 to10 lakhs, and only 24 

lakhs declared income above Rs.10 lakhs. No better evidence 

is required to substantiate that both in the matter of direct 

and indirect taxes India continues to suffer being a hugely 

tax non-compliant society.

•Expenditure required for poverty eradication, national security 

and economic development have to be compromised with on 

account of tax non-compliances. For seven decades the Indian 

“normal” has been to undertake transactions partly in cash and 

partly in cheque. “Pucca” and “Kachha” accounts are a part of the 

business language. Tax evasion has been considered as neither 

unethical nor immoral. It was just a way of life. Several 

Governments have allowed this “normal” to continue even though 

this compromised with larger public interest. The Prime Minister’s 

decision is intended to create a new “normal”. It seeks to change 

the expenditure pattern of India and Indians. It is obviously 

disruptive. All reforms are disruptive. They change the retrograde 

status quo. The demonetisation puts a premium on honesty 

and penalises dishonest conduct.