Demonetisation process is almost complete: Jaitley

Finance Minister Arun Jaitley today said the demonetisation process is almost complete, hailing it as the "smoothest possible replacement" of high denomination currency anywhere in the world.

Describing the government's decision to take Rs 500 and Rs 1,000 notes out of circulation as a move towards creating a "new normal" in India, the minister told an audience of students and academics at the prestigious London School of Economics that it would ultimately lead to far higher growth rates.

"We have almost completed the demonetisation process and it has been the smoothest possible replacement of currency anywhere in the world," said Jaitley, the Union Minister for Finance and Corporate Affairs.

"Demonetisation was a move to change the Indian normal... a new normal had to be created. A predominantly cash economy has now to be substituted with a digital economy, which will bring more money into the banking system and lead to better revenue generation; the integration of the informal economy with the more formal one is now taking place.

"The post-demonetisation regime is actually going to generate a far bigger GDP in the long run," he said, adding that any arguments in favour of the "virtues of a cash economy" were "absolutely trivial".

Speaking on the subject of 'Transforming India: Vision for the Next Decade', the minister said India was standing "at a point of history" where the country as a whole becoming "more and more aspirational".

"The global economy continues to face its own challenges. Any slow growth in the world impacts us also...but 7-8 per cent growth rate is the new Indian norm and if we get the support of the global economy, that figure has a scope of shooting up," he said.

The senior BJP leader also praised the "competitive federalism" among the states in India, which were vying with each other to grow 4 to 5 per cent more than the national level and in the process increasing the country's overall growth rate.

He also reiterated his July 1 estimate for the rollout of the Goods and Services Tax (GST) to transform India into "one large economic market" and remove the existence of a "shadow economy".

"Democracy does delay some decisions but at the end of day, a sense of responsibility does win. Most decisions are being taken unanimously and we will hopefully hit July 1 as the date for GST," he said.

Addressing questions from students later, the minister described the country emerging as an important "brain bank". "I am no longer willing to settle for slogans like Indians for India alone. Terms like brain drain were a subject when I was in college. Today Indians are dominating various economies of the world and one of our major points of global discussions today is about the movement of human resource," he said.

The finance minister is in London on a five-day visit, which centres around a special reception hosted by Queen Elizabeth II at Buckingham Palace on Monday evening.

He will also be meeting senior member of the British Cabinet, including UK Chancellor Philip Hammond and foreign secretary Boris Johnson, during his stay here.

In reference to any new trade deal with the UK post-Brexit, Jaitley said the exact details can be thrashed out only after the process of Britain leaving the European Union (EU) is complete.

"In our discussions with the government of UK what we have understood is that they are keen to send a message that there will be no move towards any form of protectionism. As for expanding the nature of economic relations between our two countries, that can take place after Article 50 is invoked, Brexit negotiations are complete and the UK is legally entitled to enter into other negotiations," he said.

The minister is also scheduled to meet a series of investors and CEOs over the course of his visit, during which he said his message would be that in the next decade, India would be one of the most open economies of the world.