Demonetisation not last action against corruption: Arvind Panagariya

There will be some impact in 2016-17 fiscal because of demonetisation, Panagariya said

Terming Prime Minister Narendra Modi's demonetisation scheme as a "frontal attack" on black money, NITI Ayog vice-chairman Arvind Panagariya today said more such actions are in store to curb corruption.

"If you are asking that demonetisation is the last step to curb corruption, then I will say no. I think more actions will be taken, but in terms of taking action against the existing black money and also in changing the roles, and the policy regime in such a way that future accumulation of black money is also discouraged.... So we need to do both," Panagariya told a local news channel during his visit to the state to attend a function.

Stating that he should not speculate on the actions to be taken, the NITI Ayog vice-chairman said the Prime Minister has to decide about this in consultation with his advisors.

"We will wait and see...," he said adding, discussion were on and hopefully some action would be seen in the budget.

He said the Union Finance Minister had already had a commitment to streamline the corporate income tax and hopefully some progress would be made.

"Some progress was made last year. Lets hope more progress in the coming year. So simplification of taxes and reduction in the tax rates should discourage accumulation of black money," Panagariya said.

Replying to a question on the changing scenario in wake of demonetisation scheme, Panagariya said, "There will be some impact in the 2016-17 fiscal because of demonetisation. We have only the five months left.

"In the pre-demonetisation, we did okay and the GDP growth was 7.2 per cent. Currently we don't have information to access, but I can tell you of 13 analysts and observers, 11 said the impact will be less than one per cent while two predicted a larger impact," he said.

Asked about the negative impact of demonetisation on the people, Panagariya said, "The people have been with the Prime Minister despite hardships and they are also observing that he is doing it ultimately for the goof of the country."

"The black money holders are being punished. I will say few governments had this courage to make a frontal attack on black money. The Prime Minister has, in fact, done a frontal assault on black money and people are generally supportive of it," Panagariya added.