New Delhi, Nov 7: Mounting a powerful defence of the note ban aimed to curb black money and corruption, Finance Minister Arun Jaitley on Tuesday said that as a disruptor of the status quo ante the demonetisation , along with other actions taken, has set in motion a process of changing the way India spends money.
Addressing the India Today Conclave Next here, Jaitely asserted “If you look back at all the steps we have taken in the last three-to-four years, besides demonetisation, we have succeeded in bringing centre-stage the whole issue of how financial transactions in India ought to be carried out”.
“The question before us was do we continue with the status quo ante of a high cash dominated society with all its aberrations,” he said, adding that the situation was untenable for the fastest growing big economy that aspires to “sit at the high table with developed nation”, he added.
The choice staring at the face was whether “we allow the status quo to continue or set in motion a process guided by the belief that an aspirational nation has to change.”
Highlighting the normal practice of purchasing real estate by partly paying in cash, or of companies having dual bank accounts to evade tax, the Finance Minister noted that various related actions taken had the triple objective of cutting cash use, increase the country’s tax base and the number of digital transactions.
“You have to see it (demonetisation) together with the spending curbs imposed on cash, the thrust on income disclosures, the thrust against benami properties,” he stated.
“Taking all this, there’s going to be a sea change in the manner in which India spends money,” he further asserted.
Terming the bold step against black money as an ongoing process, Jaitley described the fact that most of the old currency notes had returned to the system as a success for note ban.
“Cash outside the system can be laundered, but once deposited it lacks anonymity..it is in an account, which has a holder with a name and the money can be taxed,” Jaitley said.
Speaking about the impact of note ban on the GDP and on the Indian informal and small scale sector , Jaitley stated this was the transitory effect of “two back-to-back reforms including GST.”
“Is the setback for one or two quarters too much price to pay? Do we forego structural reforms for that,” the finance minister questioned.
Wefornews Bureau
