On the first salary day after demonetisation when most banks ran out of cash within hours, Union Finance Minister Arun Jaitley said the difficulties would end soon.
“The remonetisation process follows the demonetisation which is currency replacement. The Reserve Bank of India is inducting a specific amount of currency into the market day after day. Initially, people have faced difficulties. As more currencies enter the market system and the process of remonetisation becomes stronger, difficulties will fade away,” Mr. Jaitley told a BJP-organised talk on ‘Indian Economy; The New Normal’ here on Thursday.
“The difficulties are not going to stay on for months. The RBI is going to complete the process of remonetisation through the banking system as earlier as possible,” he said.
Reacting to massive criticism of the demonetisation, the FM said “politicians and media have not changed while the whole country has moved ahead.”
“The Congress and Left parties express apprehensions about India becoming a ‘less cash’ country. But, we are moving towards a time when our country will become less cash in the true sense. The use of digital currency will go up.”
“I keep asking banks about statistics on digital currencies. The statistics surprised me. The digital currency in shape of debit, credit cards and e-wallets available in the market is about 80 crore. Of these, 45 crore are in active use,” he pointed out.
“Imagine a situation when use of digital currency goes up and use of paper currency is minimised — what would be the impact of trade depending on digital currency. The country will definitely see a bright future,” said the senior BJP leader.
While the Indian economy was improving with better public investment and Foreign Direct Investment, the country faced twin challenges – global slowdown and rising non-performing assets (NPAs) due to bad loans lent during the UPA regime. Due to the NPAs banks had lost their ability to support the economy, said Mr. Jaitley.
“We used to strengthen the banking system through the recapitalisation route and charging higher interest rates. Suddenly, a very big amount of money which was outside the system is now part of the banking system. Banks’ power to lend money for social infrastructure, industries and other physical infrastructure will improve,” the FM said, terming the demonetisation as a defining moment in the economy.