Positive effect to be seen from April, says FinMin

New Delhi, Feb. 28: The positive effects of demonetisation will be visible from April and the completion of remonetisation process will drive consumption going forward, economic affairs secretary Shaktikanta Das said on Tuesday.

The states and the Centre have “converged on all areas of differences” over the GST and the indirect tax reform will be implemented from July 1, unleashing the growth potential of the economy.

“The impact of DeMo was mostly on consumption and that was temporary. Long term and medium term, in the next quarter onwards, the benefits and outcomes are going to be very very positive,” Mr Das said.

“As the process of remonetisation progresses, and it is almost near complete, any adverse effect on consumption during that quarter is not likely to spill over to next year. So that phase is over, it is behind us,” he added.

Das was speaking at the launch of OECD’s Economic Survey for India which cut its growth forecast to 7 per cent from 7.4 per cent earlier due to demonetisation. It, however, forecast growth to pick up to 7.3 per cent in 2017-18 and further to 7.7 per cent in 2018-19.

“GST is going to unleash a huge quantum of growth impulses. The effect will be felt and once India becomes one market, there will be positive impact on growth impulses,” Mr Das said.