The government is may abolish discretionary powers given to tax officers in deciding liabilities for evasion, NITI Aayog Vice-Chairman Arvind Panagariya told India Today on Friday. “A lot of evasion of tax happens when there is too much discretion on the part of officers. So, we need to simplify this,” he said.

Panagariya also said that the government is beefing up enforcement against tax evaders in the real estate sector. Further, he suggested that high rates of stamp duty might at some point be reduced.

In the interview, the economist also defended Narendra Modi government’s decision to demonetise Rs 500 and Rs 1,000 notes. He said that this is the first time a developing economy has tried to stamp out corruption on a large scale. “The step that has been taken is an essential step. It is not the last step,” he said.

On former prime minister Manmohan Singh’s criticism of demonetisation, Panagariya said, “I really wished that the former prime minister Dr Manmohan Singh had also given his arguments very clearly why he thought this was loot, why he thought this was plunder.” He said that he disagreed with Nobel laureate Amartya Sen’s observation that the demonetisation was a “despotic action”. He said that the public sentiment is appreciative of the government’s step.

However, he said that the currency ban may slow down the economy in the next two quarters, but growth would “recover rapidly in the next financial year”. Panagariya said to capitalise the benefits of demonetisation, digital transaction needs to be promoted in a huge way.