Naidu, who is in Botswana on an official visit, said the southern African country is also following India's efforts to curb black money.
He said reformative measures like demonetisation "may be painful but are meant for public good".
"Paisa joh bedroom, bathroom aur pillow ke neeche tha, woh bank mein pahunch gaya. Pata ke saath, pita ke saath aur pati ke saath (The money that was in the bedroom, bathroom and under the pillows reached banks due to demonetisation)," the vice president said.
Interacting with the Indian community in Botswana here on Thursday night, he said measures like demonetisation were "temporary pain for long term gain".
"Now how much (of this money) is white, how much is tax-paid money that will be known. It is the duty of the Reserve Bank of India and income tax people to verify and see to it that everybody falls in line," the vice president said.
"You are aware that Government of India has launched several flagship schemes for making India a skilled and knowledge society and manufacturing hub. Measures like the introduction of Goods and Services Tax (GST) have also been taken to make it a transparent and integrated market with greater ease of doing business," he said.
India has taken a major leap towards financial inclusion by encouraging 330 million people to open bank accounts, Naidu said. The tax base has widened by 26 per cent in the last one year with nearly 68 million tax payers paying taxes, he said.
Naidu termed Botswana as a land of god-gifted serenity and natural beauty.
He asked Indians everywhere not to forget their mother tongue and motherland. "I am not against other languages. One must learn as many languages as possible, but should not forget the mother tongue," he said.
"I know that many of you have been living here for several decades and have made Botswana your second home. The Indian diaspora in Botswana has not only well-integrated into its pluralistic, free and democratic society, but, also have immensely contributed to the economy of Botswana," he said.
"I am glad that you have contributed hugely to the successful story of Botswana's economic growth," he said.
He thanked the Indian community here for contributing to flood relief in Kerala.
Naidu, who is on an official trip to the African nations of Botswana, Zimbabwe and Malawi, said India is changing rapidly.
"The business environment is changing for the better. The archaic regulations are being dismantled. Seamless processes are being introduced," he added.
If the talented enterprising Indian diaspora can lend its active support, the pace and quality of transformation in India can be considerably enhanced, he said.
Naidu hoped that Indians abroad will continue to cherish their Indian roots and nourish the socio-economic and cultural life of Botswana and other countries with which they are connected.
"You are India's cultural ambassadors and the world sees you as the representatives of Indian values and way of life," he said.
Naidu also expressed satisfaction that the Swachh Bharat initiative, launched when he was Union urban development minister, has become a people's movement. Four crore toilets have been built under the scheme, he said.