The Narendra Modi government has been severely criticized for the dramatic demonetisation drive announced on November 8, 2016. Nearly a year later, the debate refuses to die down: Did NaMo’s DeMo work?

As if to underscore its pursuit of the original goal, the government has decided to celebrate the first anniversary of the momentous event as Anti-Black Money Day.

The opposition has said that demonetisation slowed the economy and brought hardship to the population at large. But the main data point that is being showcased by those opposing demonetisation is the number of high-value notes that have come back to the central bank.

Over 99 percent of the demonetized Rs 500 and Rs 1,000 notes are back in the banking system. According to the RBI annual report Rs 15.28 lakh crore came back, out of Rs 15.44 lakh crore in circulation. In the early days of demonetisation, experts had estimated that nearly Rs 3 lakh crore of unaccounted money would not come into the system. Then Attorney General Mukul Rohtagi is on record saying that Rs 4-5 lakh crore would probably not find its way back.

With only Rs 16,000 crore not returning, the Opposition and those against the entire exercise used this number to criticize the government. The government and its supporters were ridiculed on all available platforms for making the country go through so much pain for nothing.

But the government knew that the money coming back in the banking system did not make it legitimate. The government through its own sources and media reports knew that tax evaders had managed to legalise their unaccounted money using ‘money mules’ to make deposits, buy gold and foreign currencies as well as make backdated high-value purchases.

The onus was clearly on the government to prove that demonetisation was a success. Swallowing its pride, the government waited patiently for data to show up. One year down the line data has just started trickling in.

The government’s crackdown on shell companies shows that around 35,000 of the 2.24 lakh shell companies deposited Rs 17,000 crore post the demonetisation drive only to withdraw it later, thus raising suspicions of ‘wrong entries’.

In one such case an account with a negative balance just before the demonetisation day saw Rs 2,484 crore being deposited and withdrawn soon after. Other examples were also shared by the Finance Ministry and Corporate Affairs Ministry to showcase how the money entered the banking system.

The Income Tax Department, which is responsible to track down the deposits, has rolled up its sleeves. It will start dispatching notices under the Income Tax Act to nearly 70,000 entities that deposited over Rs 50 lakh each in old notes into bank accounts but did not care to reply to data uploaded in their accounts or even file returns. A total of 2 lakh such accounts were identified; 1.3 lakh account holders have already responded to the inquiry.

Assuming that the average deposit in the 70,000 accounts is at the minimum level of Rs 50 lakh then we are talking of Rs 35,000 crore of money that has entered the banking system but there is no money trail to it. This money is over twice the amount that went missing post-demonetisation.

Watch | One Year Of Demonetisation - A Look Back At The Timeline

Apart from this, the IT department has identified 18 lakh cases which it believes feature suspect deposits. Out of this, around 12 lakh accounts have already responded. The focus is now on the remaining 6 lakh-odd accounts.

The government is checking other data points which signal how unaccounted wealth could be used. One such is the sharp surge in overseas travel expenditure from USD 36.2 million in November 2015 to USD 246.6 million in November 2016.

Further, post demonetisation, gold consumption shot up to more than double the normal monthly consumption. This was followed by gold prices in the unofficial market doubling. Exchange rates of dollar and euro had also shot up post demonetisation.

Having faced criticism in the lead-up to the first anniversary of demonetisation, the government now holds all the cards in its hand. It will disclose the numbers slowly, probably as it collects more evidence but also because it wants to capitalise on the election season.