Formalising the economy: Policy reforms have set off a chain reaction, says Arun Jaitley

The finance minister said that digital transactions are fast replacing cash as the predominant instrument for transactions with a series of government initiatives to formalise the economy. “Cash being the predominant instrument is gradually changing and therefore you require an initial shakeup and now we have been nudged into a system where we all realising that convenience, security and even proprietary lies in switchover itself,” he said.

Jaitley further said that today nobody can legitimately complain that he has no access to banking. “A little less over three years ago half of the population had no access to banking operations and then whether it was public sector initiative on financial inclusion or expansion of banking in various modes, today nobody can legitimately complain that he has no access to banking. The most important aspect of this is that this is a new  chapter in history which is being written and that new chapter in history is that almost every day some such initiative is taking place which really is resulting in greater formalisation of Indian economy,” he said.

He said that earlier banks were perceived to be brick and mortar branches. “In fact my fraternity in politics is still reasonably behind times. I still get representations during Parliament session from my colleagues who only insist on brick and mortar branches to be opened in their constituencies,” he said.

But now with the switchover happening to the digital space, Jaitley said only “isolated cases will find themselves as an exception”.

“Conventional traditional mind will find it extremely difficult to accept this itself but then the whole mass below itself will change and only isolated cases will find themselves as an exception,” he said.