Finance minister Arun Jaitley called on Saturday government’s decision to ban Rs 500 and Rs 1,000 notes as courageous and said India now has the capacity to take decision on demonetisation.
“The fact that India today has the capacity to take these decisions and capacity to enforce them, to experiment boldly even when at a time when the world is looking more inwards, marks an exception as far as India is concerned,” Jaitley told a gathering of industry leaders at the 89th annual general meeting of FICCI.
He said note ban will have long-term benefits and the entire process of remonetistaion won’t take a long time.
He also hinted that not all of the Rs 15.44 lakh crore worth of currency junked will be remonetised through issuance of new notes as he said digital currency will fill the gap.
“One of the efforts of this exercise has to be that even though a reduced cash currency could remain, our conscious effort... (is) to supplement the rest with a digital currency,” he said.
Describing India as one of the fastest growing major economies in the world, Jaitley termed the decision to demonetise an important beginning of development.
“As far as the decision with respect to currency is concerned, it marks an important beginning. This decision decides several other implications,” he said.
He said that almost 75 crore debit and credit cards that exist in the market, besides e-wallets, will help increase digital transactions. He also made a pitch that these transformations will have to be carried to their logical conclusion.
“There are, of course, even as we reform, domestic trends which are being visible on digitisation of payments,” Jaitley said, adding that the government has clarity of direction as well as a broad shoulder and stamina to sustain these decisions.
Taking a dig at the Congress government, the finance minister said the move will create a new Indian normal as the one that existed for the past seven decades is “unacceptable”.
“The 70-year normal had become a way of life for almost every Indian. It was not merely a fact that you had a lot more cash currency, far larger cash currency as part of your GDP... the economic and social consequences of that are extremely adverse,” he said.
The opposition has been targeting the government over note ban saying the move has left millions facing severe cash crunch.
On Friday, Prime Minister Narendra Modi attacked the Congress for opposing the decision and refuted allegations that demonetisation was done without homework.
The prime minister said note ban decision should have been taken in 1971 when Indira Gandhi was heading the government.
“We needed to do it in 1971. We have caused huge losses by not doing this since 1971,” Modi told BJP MPs.
(With inputs from PTI)