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.
“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.
He said that Prime Minister Narendra 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.
"Eighty six per cent of India’s currency was replaced within a matter of few months. The remonetisation got substantially completed,” he said.
The Finance Minister said that the move brought about a far greater movement towards digitisation.
“It ended the anonymity related to cash operations in the system and hopefully, in the days to come, the taxation base of India would expand,” he said.
Jaitley also said that India clocked between 7 and 7.5 per cent economic growth rate even in an adverse global environment.
He said that over the next decade or two, there will be plenty of avenues for long-term investment in India.
Jaitley said that the government has systematically addressed the challenges facing ease of doing business in the country including getting environmental clearances.
In this year’s Budget, the foreign investment promotion board (FIPB) has been abolished “so that investors, who require permission to get into the country, don’t have to go through multiple permissions.” Later speaking at a seminar at Institute of International Finance (IIF) here, Jaitley said he did not see the idea of protectionism spreading globally and weighing on economies including that of India.
“Even though we hear transient voices of protectionism in the world, at the end of the (day) it is the companies, consumers who are going to decide that they will need products or services which are cost competitive. They cannot be pushed into inefficiencies,” he said.
He said India’s experience has been that integration and greater liberalisation has seen the economy and trade grow.
“Our own experience has been that global integration, greater domestic liberalisation, greater integration and more trade has certainly helped us.
“And the entire momentum and impact of more trade itself is going to benefit the global economy,” he added.