• search
For Quick Alerts
For Daily Alerts

Demonetisation will help economy in medium and long term, says Jaitley


New Delhi, August 31: A day after the Reserve Bank released report on demonetisation, Finance Minister Arun Jaitley on Thursday said the fallout of note ban was on predicted lines and the economy will benefit in a medium and long term.

The RBI said that almost all of the demonetised currency came back into the system, Jaitley said the fact that money got deposited in banks does not mean that all of it is legitimate money.

Demonetisation will help economy in medium and long term, says Jaitley

"It's nobody's case that black money has been completely eliminated after demonetisation," he said. He said demonetisation, coupled with GST, will give a "significant boost" to direct tax revenues as many people have come under the tax net.

Although an overwhelming amount of money was deposited in banks it is not a concern for the government as it is good for the economy that more money has come into the formal system.

"The fallout of demonetisation is on predicted lines ... the fact that money got deposited in banks doesn't make it legitimate money," he said, adding the country was ready for demonetisation even though there was political resistance.

The RBI yesterday said about 99 per cent of Rs 15.44 lakh crore demonetised currency came back into the system.

On the Goods and Services Tax (GST), Jaitley said its inflationary impact has been avoided and there is a scope of convergence of tax rates going forward. The minister also said that consolidation of PSU banks is on cards as the country needs "fewer but stronger banks".

The RBI has already recommended banks to initiate insolvency proceedings against 12 large defaulters.

On bad loans, he said that resolution will take time. "You can't have a surgical solution to it", he said. If private sector cannot pay back its debts then someone else should be allowed to take over, he added.


For Daily Alerts
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more