The Centre’s demonetisation move and the push for a digital economy would boost India’s GDP and the nation needs to move towards a tax-compliant society to achieve higher growth, Arjun Ram Meghwal, Minister of State for Finance said.
Speaking at the inaugural session of Madras Annual Convention 2017, the Minister said there had been a lot of debate about the impact of the note ban on the GDP and experts were split on the issue.
Mr. Meghwal said about 23.2% of the economy was a shadow economy or, in other words, unaccounted for and the push for cashless transactions would widen the tax bracket.
“Our tax net will increase and the shadow economy will start getting accounted and hence the GDP will definitely increase,” he said.
The Minister said India had a high cash to GDP ratio when compared to other advanced economies and the digital push would narrow it. In advanced countries, the cash-to-GDP ratio was in range of 4, while in India it was pegged at 12.
