FM: Demonetisation is almost complete

Jaitley says any arguments in favour of the virtues of a cash economy absolutely trivial; 7-8% growth rate new ‘normal’

FINANCE MINISTER Arun Jaitley on Saturday said the demonetisation process is almost complete, hailing it as the “smoothest possible replacement” of high denomination currency anywhere in the world.

Describing the government’s decision to take Rs 500 and Rs 1,000 notes out of circulation as a move towards creating a “new normal” in India, the minister told an audience of students and academics at the prestigious London School of Economics that it would ultimately lead to far higher growth rates.

“A predominantly cash economy has now to be substituted with a digital economy, which will bring more money into the banking system and lead to better revenue generation; the integration of the informal economy with the more formal one is now taking place... The post-demonetisation regime is actually going to generate a far bigger GDP in the long run,” he said, adding that any arguments in favour of the “virtues of a cash economy” were “absolutely trivial”.

Speaking on the subject of ‘Transforming India: Vision for the Next Decade’, the minister said India was standing “at a point of history” where the country as a whole becoming “more and more aspirational”.

“The global economy continuestofaceitsownchallenges.any slow growth in the world impacts us also...but 7-8 per cent growth rate is the new Indian normal and if we get the support of the global economy, that figure has a scope of shooting up,” he said.

He also reiterated his July 1 estimate for the rollout of the GST to transform India into “one large economic market” and remove the existence of a “shadow economy”. “Democracy does delay some decisions but at the end of day, a sense of responsibility does win. Most decisions are being taken unanimously and we will hopefully hit July 1 as the date for GST.”

Addressing questions from students later, the minister described the country emerging as an important “brain bank”.

“I am no longer willing to settle for slogans like Indians for India alone. Terms like brain drain were a subject when I was in college. Today, Indians are dominating various economies of the world and one of our major points of global discussions today is about the movement of human resource,” he said.

The finance minister is in London on a five-day visit, which centres around a special reception hosted by Queen Elizabeth II at Buckingham Palace on Monday evening.

In reference to any new trade deal with the UK post-brexit, Jaitley said the exact details can be thrashed out only after the process of Britain leaving the European Union is complete.