Demonetisation to have positive impact on GDP in long run: Arun Jaitley

It will eliminate the shadow economy and tax evasion

Union Finance Minister Arun Jaitley on Thursday said that the government's initiatives, including demonetisation, to eliminate the shadow economy and tax evasion will positively impact the GDP and fiscal consolidation of the country in the long term.

"The government's measures to eliminate the shadow economy and tax evasion are expected to have a positive impact both on GDP (Gross Domestic Product) and on fiscal consolidation in the long run," Jaitley said at the 16th Financial Stability and Development Council (FSDC) meet here.

"Though the world economy is quite fragile yet India appears to be much better placed today on the back of improvement in its macroeconomic fundamentals," he added.

The financial regulators offered their suggestions for the upcoming Budget 2017-18, which were deliberated upon by the Council. The Council also reviewed the present status of non-performing assets of banks and the measures taken by the government and the Reserve Bank of India (RBI) for dealing with the stressed assets.

The FSDC also discussed about the various initiatives taken by the government and regulators for promoting financial inclusion and financial literacy and discussed further measures for promoting it.

The FSDC meeting was attended by all the financial regulators and senior officers of the Ministry of Finance, including RBI Governor Urjit R. Patel, Finacne Secretary Ashok Lavasa, Economic Affairs Secretary Shaktikanta Das, Revenue Secretary Hasmukh Adhia, Financial Services Secretary Anjuly Chib Duggal, Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Kumar Gupta, Chief Economic Adviser (CEA) Arvind Subramanian, Securities and Exchange Board of India Chairman U.K. Sinha, Insurance Regulatory and Development Authority (IRDAI) Chairman T.S. Vijayan and Pension Fund Regulatory and Development Authority (PFRDA) Chairman Hemant G Contractor.