Government should make the best use of demonetisation and come out with a Budget full of out-of-box ideas, economists told finance minister Arun Jaitley on Tuesday.
In a pre-Budget meeting with the Union minister, some participating members suggested that the upcoming Union Budget should not be a conventional one as these are not normal times, a ministry statement said.
“Rather, the government should make best use of the opportunity arising from demonetisation to present a Budget full of out-of-box ideas. Members suggested that provisions should be made in the Budget to ensure that generation of black money is curbed,” it said.
Pointing out that India remains a bright point in global economy and BRICS in particular, Jaitley said the government has taken many steps — such as passing of GST Bill, institutional reforms like UDAY, banking reforms and focus on infrastructure, among others — to further boost growth.
He said the growth in US is weaker than anticipated earlier and Brexit has led to disturbing reactions in the markets.
However, Indian economy has made significant improvements as growth remains stable, and we are in comfortable fiscal and debt situation, he said.
He said the government has taken various decisive steps in the last two-and-a-half years which have helped the economy to get out from inflationary spiral to stable prices.
{{/usCountry}}He said the government has taken various decisive steps in the last two-and-a-half years which have helped the economy to get out from inflationary spiral to stable prices.
{{/usCountry}}Economists suggested that provisions should be made in the Budget to ensure that generation of black money is curbed and it should be decided by the market how much cash needs to be infused into the economy.
“They mentioned that in terms of use of cash, our economy is worse. They said that we use much more cash than our neighbours (with almost similar culture and mindset) use for similar economic activities. Some countries with even larger informal sectors use lesser amount of cash comparatively,” it said.
Some members also expressed the need of transparency on the government’s part and wanted it to come out with a statement in the Budget which should detail clearly what costs have been incurred due to demonetisation.
Commenting on demonetisation, members said it can curb black money for the moment, but cannot check the generation of illicit money.
“So next task should be to stop generation of black money in future. For this, government should incentivise people to move from informal to formal system and maximise use of e-payments,” it said.