Finance minister Arun Jaitley said on Friday that one of the benefits of demonetisation of Rs 500 and Rs 1000 banknotes is that the nation will have significantly less paper currency.
Speaking at the Hindustan Times Leadership Summit, Jaitley said demonetisation will help the economy in the following ways:
1) Deposits with banks come with a lower cost, hence this will help lower lending rates.
2) The government will gain from exemplary taxes on unaccounted-for cash deposited post demonetisation.
3) Demonetisation will help widen both direct and indirect taxes.
4) Part of the Rs 14 lakh crore or more in Rs 1000, Rs 500 that doesn’t return goes into the RBI’s credit. This can be used for constructive purposes.