The Finance Minister Arun Jaitley has expressed hope that demonetisation will help to increase government revenue and lower fiscal deficit. Also, the move towards a digitised economy will help to have a higher economic growth which in turn will imply less borrowing and help to achieve an overall cleaner economy. He said that the rise in government’s revenue will lead to higher expenditure on defence and rural infrastructure. Further, the government aims to bring down fiscal deficit to 3.99 percent of Gross Domestic Product (GDP) this fiscal. India’s fiscal deficit for the first seven months of current financial year 2016-17 stood at Rs 4.23 lakh crore or 79.3 per cent of the full-year target.
Jaitley said that with the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency. He also said that shifting towards less cash economy will help bridge fiscal deficit and bring about improvement in rural India. He added that the government will pass on lesser burden to the posterity if the fiscal deficit is lower. At the same time, it will augment capability of administration, increase defence expenditure and improve spending on the poor.
The Minister also said that anonymity of money is gone with demonetisation as the money has come into the banking framework and becomes part of the formal system leading to strengthening of banking, and money in the system becomes part of the taxation system too. Recently, the government in order to encourage digital transaction has unveiled two schemes, Lucky Grahak Yojana and Digi Dhan Vyapaar Yojana for customers and traders to promote mobile banking and e-payments. A total of 15,000 people will get rewards as Christmas gift through a draw, whereby each of them will have Rs 1,000 in their accounts, the scheme will continue for the next 100 days.