Union finance minister Arun Jaitley on Thursday defended the NDA government’s demonetisation that aims to transform India into a cashless economy, saying that cash transactions lead to a shadow and parallel economy.
In his address in the Lok Sabha on the Union budget, Jaitley also said that the country was on a fast-track to becoming a developed economy from a developing one with reforms such as demonetisation and Goods and Services Tax.
Here are five takeaways from his speech:
1. Demonetisation will expand the formal economy, push tax collections and help banks in reducing interest rates, excessive usage of cash boosts a parallel economy.
2. NPA is a legacy problem, most big ticket loans that have turned unproductive have been given during the 2007-8 period, over-management of banks during the UPA time has led to this problem.
3. Electoral bonds allow anonymity to people who are donating to political parties. Anonymity of these people is critical as they may otherwise be prey to many problems including political vendetta.
4. Protectionism is rising all over the world and India has to ensure that this does not affect its economy.
5. Critical to remain on the fiscal consolidation path while increasing public expenditure. It is not just important to contain fiscal deficit but the quality of fiscal deficit is equally crucial.