Economic Affairs Secretary Shaktikanta Das on Tuesday said the benefits of the note ban will be felt from April onwards, and the completion of the remonetisation process will fuel consumption, PTI reported. Das was speaking at the launch of the Organisation for Economic Cooperation and Development’s Economic Survey for India, which pegged the gross domestic product for the current year at 7%. The survey said India’s growth rate would rise to 7.3% in 2017-2018 and increase to 7.7% in 2018-19.
Das dismissed the impact of the demonetisation drive as largely restricted to consumption and temporary. “From the next quarter, long-term and medium-term benefits and outcomes are going to be very positive,” Das said.
OECD Secretary-General Angel Gurria extended his support to Prime Minister Narendra Modi’s demonetisation drive and said the transition towards a cashless economy will not affect jobs or investments. Referring to India as one of the best reformers among the G-20 countries, Gurria advised the government to continue its reform momentum for more inclusive growth.
The economic affairs secretary said the Goods and Services Tax will “unleash a huge quantum of growth impulses”. Das said states and the Centre had “converged on all areas of differences” over the tax, which is scheduled to come into force on July 1.
The organisation, meanwhile, recommended that the government focus on labour laws, stressed assets, and other product regulation to improve the economic scenario. Its report said there was no room for “complacency by policy makers”. Das said the government’s focus on speedy delivery and implementation of schemes ensured that there was no complacency.
The report suggested that the government focus on macroeconomic stability poverty reduction, more comprehensive tax reforms and initiatives to increase productivity and reduce disparities.
On November 8, Prime Minister Narendra Modi had announced that the Centre had decided to demonetise the Rs 500 and Rs 1,000 notes to weed out corruption and black money from the market. New Rs 500 and Rs 2,000 notes were then issued. The drive drew flak from several quarters citing “failure of execution” and “bad planning”.