Union Finance Minister Arun Jaitley Friday spoke on the outcome of demonetisation making it clear that secure printing of currency is a time-consuming exercise, but insisted that the Reserve Bank is calibrating the release of the new currency. Even as he admitted the demonetisation move is bound to create some disruption, he said it will have benefits in the long run. His remarks came at the HT Leadership Summit.
“When you switch over, it creates disruption. I don’t see disruption lasting too long. You may see the impact for a quarter or so. Then when you look at next 12-15 quarters, it’s certainly going to benefit,” Jaitley said. “Of course, you will have some disruption created because of the switchover, in the long run, advantages are going to be huge as far as the relative cost of disruption is concerned.”
With an aim to promote digitisation, Jaitley said that volume of trade, business will grow through plastic transactions but added that the size of paper currency will substantially shrink. The Finance Minister further said that the country is changing much faster than expected, claiming that the Goods and Services Tax bill and demonetisation will be game-changers. He, however, said that investors will be wary of some states seen on wrong side of reforms. “India is likely to continue to be fastest growing major economy in world as last year,” he said.
Jaitley said the constitution does not provide delay in GST and that the amendment notified on September 16 mentions that the indirect tax can run for year, but any delay would mean no taxation from September 17, 2017.
“There is a constitutional compulsion to have GST before September 16, 2017,” he said, stressing that the country will expand into a larger economy with higher and cleaner GDP a year from now.
(With PTI inputs)