‘Benefits of demonetisation to accrue in long term’

Finance Minister Arun Jaitley said the benefits of demonetisation would be felt in the long term and a short-term pain was expected.

“Demonetisation should be seen according to the effect on the economy,” Mr. Jaitley said while addressing the Petrotech 2016 conference. “No doubt we will continue to be the fastest growing major economy. A decision of this kind carries the pain of transition. This is regrettable, but it was expected.” “When you are in a cusp of history and you look at the long-term impact of these steps which are going to be taken, I think India is going to become a society in the long term with a certainly better GDP, cleaner ethics, a cleaner economy,” he added.

Cash shortage

The Finance Minister admitted that there was a shortage of cash and that was what made the parallel shift to electronic transactions so important. “In these 2-3 months, India will move digital,” he said.

“We will achieve far more than what we have achieved in the past few decades. What we will end up achieving is to lay down a new normal.” The benefit of this new normal, he said, was the increased money in the banking system, and the greater ability of banks to support the economy.

Regarding the Goods and Services Tax and the ongoing deadlock in the GST Council over the required legislation, Mr. Jaitley said that most of the issues had been resolved and that the final draft of the legislation was being worked out.

“One issue is pending,” he added. “Since all taxes are being merged into a single tax, the issue is of how to reconcile it with the parallel machinery in the Centre and the States.” “I am hoping that all issues will be resolved soon,” he said.

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Printable version | Aug 4, 2020 5:23:54 AM |

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