You are here: Home » Economy & Policy » News » Demonetisation
Business Standard

Demonetisation to benefit economy in long run, says Panagariya

Fitch Ratings on Wednesday lowered India's GDP growth forecast for this fiscal to 6.9% from 7.4%

Press Trust of India  |  New Delhi 

Vice Chairman of Niti Aayog Arvind Panagariya talking to the media during the G20 Summit in Hangzhou
Vice Chairman of Niti Aayog Arvind Panagariya

Niti Aayog Vice-Chairman on Wednesday said the government's drive will leave a "very positive" impact on the economy in the long term as more people will move towards digital transactions.

"You see its (demonetisation) impact in the long term. It will be very positive," he told reporters on the sidelines of Global Energy Dialogue organised by CII.

In contrary to the Panagariya's views, many economists and analysts have expressed apprehensions that may pull down the economic growth in the second half of this fiscal.

Elaborating further, Panagaria said, "Financial intermediation has increased after in accounts. This means the capital which was privately invested will now be invested through financial institutions. This will have good impact (on the economy). It will increase our efficiency of transactions as we move towards digitised transactions. This will also be a positive thing."

Fitch Ratings yesterday lowered India's growth forecast for this fiscal to 6.9% from 7.4%, saying there will be "temporary disruptions" to economic activity post demonetisation.

On concerns being raised by economists and rating agencies on the economic growth front, Panagaria said, "Everybody is expressing their views. It has to be seen what happens quantitatively. Mr (Aditya) Puri from HDFC has said that it is an overstatement regarding this (impact of on growth)."

The issue has also rocked Parliament as both the Houses have been witnessing disruptions and adjournments due to the noisy protests by the Opposition parties for past several days.

On the Reserve Bank's decision to temporarily increase Cash Reserve Ratio (CRR), Panagaria said, "This is an RBI issue. When liquidity increases so much in the system, that is the kind of measure which RBI takes."

He further said, "The repo rate (at which RBI lends) and liquidity in the system have to be consistent with each other. Around Rs 8 lakh crore has come into the banking system. The other measure was through Monetary Stabilisation Scheme. But it would have taken more time.

Demonetisation to benefit economy in long run, says Panagariya

Fitch Ratings on Wednesday lowered India's GDP growth forecast for this fiscal to 6.9% from 7.4%

Fitch Ratings on Wednesday lowered India's GDP growth forecast for this fiscal to 6.9% from 7.4% Niti Aayog Vice-Chairman on Wednesday said the government's drive will leave a "very positive" impact on the economy in the long term as more people will move towards digital transactions.

"You see its (demonetisation) impact in the long term. It will be very positive," he told reporters on the sidelines of Global Energy Dialogue organised by CII.

In contrary to the Panagariya's views, many economists and analysts have expressed apprehensions that may pull down the economic growth in the second half of this fiscal.

Elaborating further, Panagaria said, "Financial intermediation has increased after in accounts. This means the capital which was privately invested will now be invested through financial institutions. This will have good impact (on the economy). It will increase our efficiency of transactions as we move towards digitised transactions. This will also be a positive thing."

Fitch Ratings yesterday lowered India's growth forecast for this fiscal to 6.9% from 7.4%, saying there will be "temporary disruptions" to economic activity post demonetisation.

On concerns being raised by economists and rating agencies on the economic growth front, Panagaria said, "Everybody is expressing their views. It has to be seen what happens quantitatively. Mr (Aditya) Puri from HDFC has said that it is an overstatement regarding this (impact of on growth)."

The issue has also rocked Parliament as both the Houses have been witnessing disruptions and adjournments due to the noisy protests by the Opposition parties for past several days.

On the Reserve Bank's decision to temporarily increase Cash Reserve Ratio (CRR), Panagaria said, "This is an RBI issue. When liquidity increases so much in the system, that is the kind of measure which RBI takes."

He further said, "The repo rate (at which RBI lends) and liquidity in the system have to be consistent with each other. Around Rs 8 lakh crore has come into the banking system. The other measure was through Monetary Stabilisation Scheme. But it would have taken more time.
image
Business Standard
177 22

Demonetisation to benefit economy in long run, says Panagariya

Fitch Ratings on Wednesday lowered India's GDP growth forecast for this fiscal to 6.9% from 7.4%

Niti Aayog Vice-Chairman on Wednesday said the government's drive will leave a "very positive" impact on the economy in the long term as more people will move towards digital transactions.

"You see its (demonetisation) impact in the long term. It will be very positive," he told reporters on the sidelines of Global Energy Dialogue organised by CII.

In contrary to the Panagariya's views, many economists and analysts have expressed apprehensions that may pull down the economic growth in the second half of this fiscal.

Elaborating further, Panagaria said, "Financial intermediation has increased after in accounts. This means the capital which was privately invested will now be invested through financial institutions. This will have good impact (on the economy). It will increase our efficiency of transactions as we move towards digitised transactions. This will also be a positive thing."

Fitch Ratings yesterday lowered India's growth forecast for this fiscal to 6.9% from 7.4%, saying there will be "temporary disruptions" to economic activity post demonetisation.

On concerns being raised by economists and rating agencies on the economic growth front, Panagaria said, "Everybody is expressing their views. It has to be seen what happens quantitatively. Mr (Aditya) Puri from HDFC has said that it is an overstatement regarding this (impact of on growth)."

The issue has also rocked Parliament as both the Houses have been witnessing disruptions and adjournments due to the noisy protests by the Opposition parties for past several days.

On the Reserve Bank's decision to temporarily increase Cash Reserve Ratio (CRR), Panagaria said, "This is an RBI issue. When liquidity increases so much in the system, that is the kind of measure which RBI takes."

He further said, "The repo rate (at which RBI lends) and liquidity in the system have to be consistent with each other. Around Rs 8 lakh crore has come into the banking system. The other measure was through Monetary Stabilisation Scheme. But it would have taken more time.

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard