India passing through fast formalisation of economy, says Arun Jaitley

The move towards digitisation was expedited post demonetisation of higher denomination currency notes, Jaitley said

Finance Minister Arun Jaitley today said India is at present passing through a stage that will in future be recognised as a phase of fast formalisation of the economy.

Speaking at a State Bank of India (SBI) event here, he said India is seeing "the replacement of a cash dominated economy with a more formal and digitised economy. One of the great changes will be the way India spends its money".

The move towards digitisation was expedited post demonetisation of higher denomination currency notes, he said.

"Today we are passing through a changing process for the Indian economy. Ten to twenty years later when the era is written about, it will be talked of as a phase with much faster formalisation of the economy," he said.

In the last one year, he said, money flow into insurance, mutual fund and IPOs has increased.

"Anonymous cash is becoming a greater part of the formal economy. It is important that we nudge people into how they spend their money," he said.

On SBI, he said the lender accounts for 20-25 per cent of all banking activity and is one of the largest banks in world after amalgamation with subsidiaries.

"It has managed to retain its performance as a highly professional institution," he added.