Slow down due to demonetisation 'transient': Jaitley

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Finance Minister Arun Jaitley on Wednesday said that the drop in economic activity due to demonetisation was only transient and its effect would not spill over to the next financial year.

"Demonetisation has a strong potential to generate long-term benefits in terms of increased flow of financial savings and greater formalisation of economy," Jaitley said while presenting the Union Budget 2017-18 in the Lok Sabha.

"Demonetisation is a bold and decisive move," Jaitley said.

Jaitley who is presenting the first budget since the Novermber 8, 2016, demonetisation decision, said that this decision will take the country a long way. "The effects of demonetisation will not spill into the next year," he added.

Finance Minister Arun Jaitley presenting the Union Budget in Parliament.

"Demonetisation was a bold move that helped in fighting black money, terror funding and fake currency," he said. Jaitley said that this move is part of a series of measures to arrive a new normal of bigger, cleaner and real GDP, he said.

Jaitley added that demonetisation has a strong potential to reap longer benefits. "It would lead to a higher GDP growth and tax revenues," Jaitley said. We can use these resources for the welfare of the poor. There is also early evidence that showed as a result of demonetisation banks were able to reduce interest rates, Jaitley also said.

(OneIndia News with IANS inputs)

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