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Demonetisation a watershed moment for Indian economy, says Arun Jaitley on one year of note ban

Finance Minister Arun Jaitley today addressed a press conference on the eve of one year of the government's demonetisation decision.

India TV Business Desk India TV Business Desk
New Delhi Updated on: November 07, 2017 16:26 IST
Finance Minister Arun Jaitley addressing a press conference
Finance Minister Arun Jaitley addressing a press conference Tuesday

Union Finance Minister Arun Jaitley on Tuesday sought to allay the opposotion's criticism of the government on demonetisation, saying the move may not be the final answer to corruption but it had definitely changed the agenda. The FM further dismissed the charge that the notes ban was an organised loot and said that it was the Congress that resorted to such measures during its rule at the Centre. 

Addressing a press conference on the eve of the anniversary of demonetisation, the Finance Minister listed out the impact the decision has seen over the past year and said that the decision had led to squeezing of terror and also led to easy identification of shell companies.

"It would be incorrect to dub demonetisation as a loot. It was an important step for the country.​ An anti-black money drive is a moral step. Loot was what happened in 2G, CWG  and coal block allocation," the FM said.

Jaitley further said that the BJP-led government had taken several steps to counter black money since it came to power and that it genuinely believed that there was a need to change the status quo.

"The government believed that there was an urgent need to shake up the status quo that existed a year ago where cash dominated transactions," he said.

"Cash currency constituted 12.2 percent of the GDP, of which 86 percent was high-denomination currency. Such a situation has an adverse effect," Jaitley said, adding that excessive cash transactions invite tax evasion.

"Societies where tax evasion is in excess, taxpayers pay not only for themselves but also for tax evaders. It is a double whammy on the tax payer.

The FM said that the resources that come in through legitimate taxes help in developing the nation and helping the poor. "When the resource-rich pocket these resources, it is unjust," he said, highlighting that demonetisation had checked tax evasion and brought in more people into the taxation net.

FM Jaitley also countered former Prime Minister Manmohaqn Singh's criticism of the government over its decisions such as the notes ban as well as the implementation of the Goods and Services Tax, saying all the latter needed to do was check India's credibility "pre-2014 and post-2014".

"Congress's primary object is to serve the family and our primary object is to serve the nation. There was policy paralysis for 10 years under Congress, " Jaitley added.

Jaitley also set aside the criticism that the notes ban had failed to deliver the desired results and said that demonetisation was aimed at moving towards less cash  and a formal economy and has hit terror funding.

"More money came in mutual funds, capital market after demonetisation. It was a structural reform under the leadership of PM Modi," the FM added. 

The Finance Minister's defence comes hours after former PM Manomhan Singh launched a series of attacks against the government over demonetisation at separate forums. 

The "twin blow" of demonetisation and the "badly-designed" and "hastily-implemented" Goods and Services Tax (GST) was a "complete disaster" for India's economy, Singh said. 

He also termed demonetisation as an ill-conceived economic policy decision and said that the exercise had led to loss in the credibility of institutions such as the RBI. 

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