Union Finance Minister Arun Jaitley on Wednesday termed demonetisation a “bold and decisive” measure and stressed that it would have a multiplier effect on the economy and create bigger, cleaner and real GDP.
“We are moving from informal to formal economy and the government is now seen as a trusted custodian of public money,” he said while delivering the Union Budget 2017-18.
Demonetisation had only a transient impact on the economy and the long term benefit include higher GDP growth and tax revenue.
Mr. Jaitley said the government had taken a series of measures to eliminate black money and curb corruption and demonetisation was a step in that direction.
Demonetisation would help in transfer of resources from tax evaders to the government. The pace of remonetisation had picked up and the situation would soon normalise.
The Minister expressed the hope that there would be no spillover effect of demonetisation next fiscal. The surplus liquidity in banks would lower the borrowing and the lending rates. The government would continue with the economic reforms for benefit of poor.
Budget focuses on 10 sectors to ensure TECIndia
Mr. Jaitley said the focus of his Budget for 2017-18 would be on 10 important sectors, including farmers, infrastructure, digital economy and tax administration to transform, energise and clean India.
The other areas of focus include rural India, the youth, poor and under-privileged, the financial sector, public service and prudent fiscal management.
“The government will continue with the reforms to boost economic activity,” he said in his speech while setting three main agenda of the Budget — Transform, Energise, Clean India (TECIndia).
He also announced a substantial increase in farm credit to Rs 10 lakh crore and “highest ever” allocation for MNREGA at Rs 48,000 crore.
Also, a long term irrigation fund has been proposed to be set up in Nabard with an additional corpus of Rs 20,000 crore.
The Budget for 2017-18 is itself a reform as it merges the Railway Budget with the General Budget and replaces Plan/non-Plan expenditure classification with capital and revenue model to give a holistic picture of government spending.
