Finance Minister Arun Jaitley today said remonetisation, following the world’s largest note ban, has been substantially completed and the move will result in expansion of the tax base in the country. In November 2016, the government junked 500 and 1,000 rupee notes, which made up 86.4 per cent of the country’s circulating currency.
As demonetised currency was allowed to be deposited in bank accounts or exchanged for new currency, the government introduced new 2,000 and 500 rupee notes. “India was not a tax compliant society. A very large part of the economy was cash-centric. This problem needed to be addressed. It requires a lot of political courage to resolve the problem,” he said at an Interactive Session on ‘India’s Business Environment: Reforms and Opportunities’ organised by CII, Indian Embassy and Japan Chamber of Commerce here.
Prime Minister Narenda Modi on November’8 last year took the unprecedented decision to demonetise the high denomination currency, which was the largest currency replacement anywhere in the world.
The finance minister said that the move brought about a far greater movement towards digitisation.
“It ended the anonymity related to cash operated in the system and hopefully, in the days to come, the taxation base of India would expand,” he said. The finance minister also said that India clocked between 7 and 7.5 per cent economic growth rate even in an adverse global environment.
Also, the discretions with the government, which had earlier led to malpractices and corruption, have been done away with and all natural resources are being allocated through market mechanism, ridding in one stroke corruption that existed in India.