Calling it a major step to build India’s credibility, Finance Minister Arun Jaitley on Wednesday said the decision to scarp Rs 500 and Rs 1000 notes will be a setback to parallel black money economy because “a lot of currency operating outside system will now have to get in to banking system”.
Jaitley said the decision has been welcomed everywhere and “it will change the course of the way people spend and keep their money”. He added that the government, after coming to power in 2014, has taken a number steps to embolden the economy and curb the menace of black money and “the new step is also of significant advantage.”
The minister said the latest decision is aimed to make India a cashless economy. “It doesn’t merely nudge the economy in that direction (cashless economy), but significantly pushes it,” said Jaitley adding that the will benefit states. He also said that the government’s decision has given a sense of satisfaction among honest tax payers.
Responding to a question of inconvenience caused to the people by sudden scrapping of the notes, Jaitley said, “Long term advantage to the economy are so significant that we would appeal to the people to bear the relative minor inconvenience for the short period of time and we will try to minimize those inconvenience.”
Reacting to Congress’s claim that such a move did not help in curbing the menace of black money in the past, Jaitley said, “There can’t be any comparison between demonetisation in 1978 and today because economy wasn’t this big then.
Jaitley also dismissed charges that the decision was taken in view of the Assembly elections in UP and Punjab. “There is no co-relation of this decision to that of elections but if this makes election costs cheap, it is good,” said Jaitley.