On November 8 last year, the government had scrapped high denomination currency notes of Rs 500 and Rs 1,000 which amounted to around 86 per cent of the currency in circulation.
Replying to a discussion on supplementary demands for grants in the Lok Sabha, Jaitley said one of the major benefits of demonetisation was squeezing of funds for terrorists in Jammu and Kashmir and naxalites in Chhattisgarh.
On questions regarding the amount of scrapped currency deposited back in the banks, the finance minister said, "Today they (RBI) have to count every currency note. They have to take the fake currency out...That exercise the RBI is taken to a very advanced level."
The minister said since March demands were being raised for disclosure of the amount of scrapped currency deposited in the banks but it can not be done over night.
"...I am hearing that argument 'tell us the currency'. Please study the subject closely. And therefore as soon as they (RBI) complete this exercise, the figure will be placed by them before the country along with the figure of fake currency," he added.
Referring to the efforts being made to deal with the menace of black money, Jaitley said the government is taking action on the information received from five sources including HSBC list, Liechtenstein, Panama papers and International Consortium of Investigative Journalists.
He said the government has decided to amend the 1988 Benami Act and not bring a new law as they want the deals since 1988 to be covered under the Benami law.
Further talking about the impact of demonetisation, he said the move has not adversely impacted the economic growth of the country as predicted by former Prime Minister Manmohan Singh, who had stated that GDP could fall by 2 per cent.
Jaitley took comfort from the fact that economy grew by over 7 per cent notwithstanding the impact of cash crunch on the economy following demonetisation.
He said demonetisation was expected to have a bearing on one or two quarters.
On the economy, he said fiscal as well as current account deficit have improved significantly besides retail inflation which currently is lowest in the decade.
Earlier, the Opposition sought to corner the government over demonetisation, saying its claims that the note ban would help eradicate terrorism and fake currency had fallen flat on its face.
Congress member K C Venugopal wanted to know from the government how much demonetised currency has been deposited in the banks, how many new notes have been printed so far and how much black money has been unearthed.
Likening demonetisation to "shooting on tyre of a fast moving car", he said it was an "ill-thought out decision" of the NDA government and the entire country was facing "bad" economic situation in its aftermath with growth and job creation declining.
The government had claimed that demonetising 500 and 1000 rupee notes was a "surgical strike" on black money and it would help get rid of fake currency and lead to decrease in terrorism. "However, the actual impact was opposite," he said.
Venugopal said that RBI Governor has twice failed to disclose the quantum of demonetised currency that has come back to the system and is saying that counting is still going on.
"When will the counting be over? The government has a motive to hide some important facts from public of India... If you cannot give the quantum of money deposited, at least give a date when you will disclose," he said.
With regard to impact of demonetisation on terrorism, he said: "The government had said that demonetisation would curb terrorism.... The situation in Kashmir is beyond our control. There has been an attack on Amarnath pilgrims... It is complete failure of all arguments given for demonetisation".
Venugopal said if most of the currency has come back to banks, then it means that there was no black money and if more money has come back than was in circulation, then it means that fake currency has been deposited in banks.
He said 1.57 lakh fake currency notes were detected between November 2016 and July 2017, which was substantially lower than over 5.4 lakh detected in 2014-15 and 6.32 lakh in 2015-16.
Trinamool Congress leader Sudip Bandyopadhyay said his party was never opposed to the idea of demonetisation but was against the way it was implemented.
He said he was of the view that "demonetisation has not risen to the level of expectations which the government had intended."
P Karunakaran (CPI-M) took a dig at the government on demonetisation saying "countless counting is going on", referring to the RBI still not having the exact amount of unaccounted money that have come into the system after the exercise.
He said that the Goods and Services Tax (GST) has put a new burden on common people as the prices of some commodities have gone up instead of coming down.
V Varaprasad Rao (YSR Congress) demanded that the MPLAD (Members of Parliament Local Area Development Scheme) fund be increased to at least Rs 10 crore per annum from the current amount of Rs 5 crore.
Konda Vishweshwar Reddy (TRS) said the central government should provide compensation to states on the basis of the latter's growth.
Describing the proposal for strategic disinvestment of public sector companies as a dangerous move, E T Mohammed Basheer (IUML) wanted to know what would happen to the employees of Air India.
BJP MP Heena Gavit, who spoke in Marathi, demanded more banks in rural areas, especially in Nandurbar, which has a substantial rural population.
She said this would be of great help at a time when the government is emphasising on Direct Benefit Transfer (DBT).
N K Premachandran (RSP) opposed the bill stating that 70 per cent of the amount specified is for the oil and gas sector. He sought to know the results achieved by advancing the budget dates.
He also accused the government of "mercilessly killing" the public sector undertaking.