Demonetisation: PM Modi has created a new normal, will clean and expand economy, says Arun Jaitley

"Demonetisation has direct relation with poor, with poverty and with poverty alleviation" Jaitley said, once the replacement of currency reaches a reasonable level, the restrictions will be eased.

By: PTI | New Delhi | Updated: November 22, 2016 5:16 pm
demonetisation, black money, pm modi, modi news, modi, narendra modi, modi black money, arun jaitley, jaitley news, jaitley demonetisation, india news, indian express, Union Finance Minister Arun Jaitley. (PTI Photo)

Prime Minister Narendra Modi has created a “new normal” of white transactions with crackdown on black money, Finance Minister Arun Jaitley said on Monday, asserting that demonetisation will lead to a jump in private investment and more public spending on welfare measures. Addressing BJP parliamentary party over the fallout o the decision, he took a dig at Rahul Gandhi saying on the one hand the Congress leader says the demonetisation decision was selectively leaked to BJP top brass and on the other he claims “that even Finance Minister, that means I, was also not aware”.

Watch: Finance Minister Arun Jaitley defends government’s move

Speaking at length, Jaitley explained all aspects of the move and said, “Demonetisation has direct relation with poor with poverty and with poverty alleviation” and said once the replacement of currency reaches a reasonable level, th restrictions will be eased.

Explaining the likely positive outcomes of this move, Jaitley said the country annually borrows Rs 4-5 lakh crore and after this move and these funds can be used for public spending for development of rural areas and uplift of poor About Rs 8 lakh crore will be collected from income tax this year and Rs 8.5 lakh crore from indirect tax but despit that another Rs 4-5 lakh crore is required to bear expenses for running the country, he said.

“..so if the honest tax paying system establishes in the country…then do we need to borrow money…and in the cas these borrowings of about Rs 4-5 lakh crore annually can be utilised in rural areas for poverty alleviation and othe similar measures,” Jaitley added .

Terming the decision as historic, he said that Modi with his courageous step has created a new normal of white transactions. “…what was normal from last 70 years that this much in cash and this much in cheque… but now Prime Minister has created a new normal,” he said.

“Today every honest citizen feels that a premium has been given for his honesty. In long term this landmark step wil increase the size of official economy and reduce the shadow economy,” he said. Giving rationale behind this move, the Finance Minister said in developed countries currency is normally 4 per cent of GDP but in India it is 12 per cent of the GDP.

Therefore, most trade happens in cash and is out of banking system. As a result black money, fake currency, an non-compliance of tax are attached with it, he added. “Today you see lakh of crores of rupees which was in cas has come into banking system. This is low cost money. Now banks will have capacities to provide more loans fo infrastructure development, agriculture and private sector… banks have also started reducing interest rates,” Jaitle added.

The cessation of legal tenders Rs 500 and 1000 is followed by remonetisation so that alternative currency shoul reach people. “Once this remonetisation reaches reasonable level, we will take back all restrictions but till then there will be a difficulty for some days,” Jaitley said.

 

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First Published on: November 22, 2016 5:12 pm
  1. S
    Satendra kumar
    Nov 22, 2016 at 1:34 pm
    The explanation by finance minister Arun Jaitley about the conception of the fund making a fair taxation system for all Indians is very constructive getting rid of corruption and black money.
    Reply
    1. M
      MyTake
      Nov 22, 2016 at 9:24 pm
      Next strike should be a decalred on and very simple. There should be a law no transaction above 5,000 Rupee to be in cash plus no amount above 50,000 Rupee can be kept at home in cash. It will also test who opposes this move when taken for discussion in Parliament.lt;br/gt;When the demonitisation sword strikes they won't even get the shoulder to cry! That will keep this front in proper shape!
      Reply
      1. N
        Nbalu two
        Nov 22, 2016 at 3:25 pm
        After the waves subsided we can bathe in the sea.our body will become clean.I am toiling hard with pmji for you poor fellows.joke by jaitly ji.
        Reply
        1. A
          A
          Nov 22, 2016 at 2:59 pm
          Mulla...MC.....
          Reply
          1. A
            A
            Nov 22, 2016 at 2:56 pm
            jai bharat jai hind...jai modi...for the bold step....
            Reply
            1. A
              A
              Nov 22, 2016 at 3:41 pm
              modi modi ..........
              Reply
              1. A
                A
                Nov 22, 2016 at 3:40 pm
                mulla...MC
                Reply
                1. S
                  Stonecold
                  Nov 22, 2016 at 5:41 pm
                  Wake up lt;br/gt;The w nation knows what you have done lt;br/gt;Now stop praising your self lt;br/gt;Get out of slumber lt;br/gt;We all know the truth lt;br/gt;But don't worry there are few fools who will still praise you
                  Reply
                  1. I
                    Ill
                    Nov 22, 2016 at 11:53 pm
                    There a no dearth of lt;br/gt;"Punch dialogues"lt;br/gt;"Catch phrases"lt;br/gt;"Management idioms"
                    Reply
                    1. A
                      ams
                      Nov 22, 2016 at 6:05 pm
                      Indian media is hand in glove with these b@@Stard politicians. Somehow news of Indore railway tragedy has disappeared from the pages in 2 days and media continues praising dearest of ht dear lord modi...
                      Reply
                      1. A
                        ashok s
                        Nov 22, 2016 at 11:57 am
                        Let's see, giving exemption to big sharks , you think you are Mr right . we need by 25th how many big sharks were held .
                        Reply
                        1. A
                          ashok s
                          Nov 22, 2016 at 11:48 pm
                          If rich are not effected , but only poor suffered that means govt clearly gave signal that poor's ate black money holders and not rich.
                          Reply
                          1. J
                            JAIHIND
                            Nov 22, 2016 at 3:27 pm
                            Mr. Jaitley has his head buried in sand, he has no idea what is going on, old notes are still in circulation, being used for business transactions and they may become the default currency to do business in with out oversight of the tax man or Mr. Modi. That might be the third form of economy, the black with new notes, the white economy and the third with the old notes in circulation. They may have a value of its own depending on supply and demand.
                            Reply
                            1. S
                              shekhar
                              Nov 22, 2016 at 4:16 pm
                              It should couple with business lic, business insurance to show for public use with local govt. To reduce black money for future
                              Reply
                              1. S
                                shekhar
                                Nov 22, 2016 at 6:40 pm
                                Writing consution?
                                Reply
                                1. C
                                  C Panneerselvam
                                  Nov 22, 2016 at 7:02 pm
                                  Hi Neo you lack sense in all your comment. You are a fanstic and people like you are not good for country like India. Our country is not only made of people like you alone.
                                  Reply
                                  1. C
                                    C Panneerselvam
                                    Nov 22, 2016 at 6:58 pm
                                    Why this govt is not acting against him fast.
                                    Reply
                                    1. C
                                      C Panneerselvam
                                      Nov 22, 2016 at 6:56 pm
                                      You lack sense. Nonsense.
                                      Reply
                                      1. D
                                        Dr Noorul
                                        Nov 22, 2016 at 10:21 pm
                                        Arun Jaitly's claim that after Modi's 'Demonetization Move' Indian economy will be clean and will expand is not true. Time will tell it.
                                        Reply
                                        1. R
                                          rishi
                                          Nov 22, 2016 at 1:14 pm
                                          True. Restoring unprecedentedly rational norms an honest society that India always was but was ill-portra by a crooked colonial-proxy's regime for several decades !
                                          Reply
                                          1. S
                                            Sreenivasan
                                            Nov 23, 2016 at 10:30 am
                                            Government had only one aim when it embarked upon this stupid program of DEMON. That it should touch everybody, particularly the poor people. Because the PM through his propaa can directly address each person and try to convince that he is a sincere and hard working man and he is working to improve their lot. Now he has not only touched every body's mind, but also rubbed the poor man in a wrong way. He had only very little money with him and he is unable to use it, as bank manager will not give him his money, unless it crosses the limit of Rs.2000. Why? The bank has to issue Rs.2000 note. No small change in hand. PM has touched everybody, every single poor man where he should not have, never.
                                            Reply
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