PM chose demonetisation for a better India, says Jaitley

Finance Minister Arun Jaitley on Wednesday hit out at critics of demonetisation, saying that Prime Minister Narendra Modi chose the harder option for a better future of India’s economy and its people.

“Economic changes don’t happen overnight, but the roadmap and agenda for them can always be led. The PM had the option of doing what many would have done — look the other way. That was easier, but he chose the harder option,” Jaitley said, addressing the Petrotech conference here.

The finance minister said that demonetisation had disrupted a seven-decade normal of society — looking the other way to corruption and black money. He said the decision of this kind causes pain in transition. It is regrettable, but has been factored in.

“When you are in a cusp of history, and you look at the long-term impact of these steps which are going to be taken, I think India is going to become a society in the long-term with a certainly better GDP, a cleaner ethics, a cleaner economy,” Jaitley said. “I am sure that this harder option will certainly leave footprints behind as far as future is concerned,” he said.

He admitted there was a shortage of cash in the system after the November 8 demonetisation move, but said the RBI has been releasing certain amount of currency and parallelly the shortage was being made up by doing more digital transactions.

Banking system
“In these two to three months, India will move digital. We will achieve far more than what we have achieved in the past few decades. What we will end up achieving is to lay down this new normal,” he said.

Jaitley said the long-term advantage of demonetisation was that more money would come into the banking system, capacity of banks to support the economy will go up. Low-cost funds would be available with banks. According to RBI, nearly 12 lakh crore old demonetised Rs 500 and Rs 1,000 notes have come back to the system.