Expressing concern over developed countries turning towards protectionism, Finance Minister Arun Jaitley has said that economies will become more inefficient and GDP will diminish if such trend were to impact trade and movement of goods and people. He also said that globally, the world is moving in an unpredictable and slow pace and a continued slowdown can pose big problems. He also noted that oil prices have increased marginally, threatening inflation and fiscal maths of importing countries like India.
Talking about demonetization, Jaitley said that the move has forced extraordinary large amount of cash, inherently anonymous, into the banking system which will not just increase ability of banks to lend at more reasonable rates, but also help in integration of informal economy into formal economy. He also emphasized that the move will eventually lead to larger transactions through banking system, more money into banking, more ability to lend at more reasonable rates and more taxes mean more reasonable rates of taxes.
The finance minister further said that post demonetisation; generating cash will be difficult, spending that cash will be difficult as transaction will be captured. He also said that the government wants to attract people to join the taxation base. Besides, Jaitley made it clear that India requires people to pay taxes. He also made the point that the nation needs to get rid of discretions and arbitrariness as such decisions in allocation of resources including coal and telecom spectrum had an impact on the country's image.