PM Modi on demonetisation: "Had warned people with black money a year earlier"

Highlights There was a parallel economy running before notes ban, PM said

Post notes ban, more people are paying taxes, PM Modi added

PM's notes ban move has been repeatedly attacked by the opposition

The sudden move to ban high-value currency notes in 2016 was not a "jhatka" (shock) as people with black money were warned a year earlier, Prime Minister Narendra Modi said in an interview to news agency ANI on Tuesday, defending demonetisation.

"We had warned people a year before, that if you have such wealth (black money), you can deposit it, pay penalties and you will be helped out. However, they thought Modi too would behave like others so very few came forward voluntarily," PM Modi said.

The PM said demonetisation was needed to bring money into the mainstream.

"There was a parallel economy running before notes ban, which had drained the country from the inside... The currency which used to be kept in sacks has returned to the banking system," he said.

The demonetisation decision wasn't taken overnight, the PM said. "The process took a year. It was necessary for the economic health of the country. But yes, when a train changes tracks, it slows down a bit," he said.

Post notes ban, more people are paying taxes, PM Modi added.

In a surprise announcement on November 8, 2016, the Prime Minister banned Rs 500 and Rs 1,000 notes overnight, leaving 80 per cent of the cash in circulation worthless. The move was aimed at curbing black money and bringing back money into the banking system.

PM Modi's notes ban move has been repeatedly attacked by the opposition, with the Congress saying India had to pay a "huge price" for demonetisation.

The PM had earlier this year said notes ban was a "bitter medicine" to give "proper treatment to deep-rooted corruption system" in the country.

With inputs from ANI