Demonetisation process is almost complete: Jaitley

26/02/2017

London, Feb 25: 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.
Jaitley blamed an "alliance of subversion" for university campus violence and argued that separatists and the ultra-Left were speaking the same language in certain campuses.
The Union Minister for Finance and Corporate Affairs made the remarks while responding to students from the South Asia Centre of the London School of Economics (LSE), who asked him about his stand on the classification of the term "anti- national" and the clashes between AISA and ABVP supporters in Ramjas College of the Delhi University earlier this week.
"Any idea which thinks in terms of disintegration of (the) country, is something I abhor. Within the framework of upholding the sovereignty of (the) country, we can ideologically differ but free speech does not permit you to assault the sovereignty of the country," Jaitley said.
Stressing that he did not believe that there was "any space for violence" on campus, Jaitley said, "I personally believe that free speech in India and in any society, has to be debated. If you believe, you have free speech to assault the sovereignty of the country, then be ready to concede free speech to counter that."
"I find this absolutely strange that an argument is being raised that I have free speech to advocate that India should be broken into pieces and those who oppose me are hindering that right to free speech. Well, they too have a right to free speech," he said.
"Violence is not the method; no group can and should use violence...there is an alliance of subversion which is taking place. The separatists and the ultra-Left are speaking the same language in certain university campuses. So they must be willing to allow others with a different opinion to put a counter viewpoint," he said.
Ramjas College had witnessed violent clashes on Wednesday between students of the Left-affiliated All India Students Association (AISA) and the Akhil Bharatiya Vidyarthi Parishad (ABVP), linked to the BJP, that had left many injured.
The clashes erupted over an invite to Jawaharlal Nehru University students Umar Khalid and Shehla Rashid to speak at a seminar on 'Culture of Protests', which was withdrawn by the college authorities following opposition by the ABVP.
Jaitley today said democracy is liberal enough in the UK to permit defaulters to stay here and that "normal" needs to be cracked, in an apparent reference to liquor baron Vijay Mallya, who is wanted in India for loan default and other cases.
Referring to loan default as a major problem that needs to be addressed, Union Minister for Finance and Corporate Affairs said India was no longer willing to let defaulters escape the law.
"Many thought that when you take loan from the banks, the money need not be re-paid and you can come to London and stay out here...and democracy is liberal enough to permit defaulters to stay here. That normal needs to be cracked," he said during a session on 'Transforming India: Vision for the Next Decade' organised by the London School of Economics' (LSE) South Asia Centre.
"It is the first time that you have strong action being taken. In fact, it has never happened that defaulters are on the run. The fact that they are on the run and their properties are being attached, is a signal that India as a country is sending for the first time. Otherwise, we had learned to live with defaulters," he said during his ongoing visit to the UK.
Mallya, the chief of the now defunct Kingfisher Airlines, had moved to Britain in March last year after banks sued him to recover around USD 1.4 billion owed by the airline.
Earlier this month, the Indian government formally requested Britain to extradite him to India for standing trial for alleged loan default and money laundering.
India and the UK have an extradition treaty since 1993, under which only one extradition from the UK to India has ever taken place, that of Samirbhai Vinubhai Patel in October, 2016, to stand trial for his alleged role in the 2002 riots in Gujarat.
Jaitley refused to confirm if the issue of Mallya's extradition would feature in his talks with senior British ministers, UK Foreign Secretary Boris Johnson on Monday and UK Chancellor Philip Hammond on Tuesday.
However, senior officials in London had indicated earlier that the issue is likely to be on the agenda.

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