DeMo was a shake-up... but achieved main targets: FM

Mumbai: Finance Minister Arun Jaitley on Friday said demonetisation was a shake-up which achieved its "principal objectives" of decreasing cash transactions, expanding the tax base and increasing digitisation.

"Confiscating" the money was not the aim, he pointed out.

"Demonetisation was certainly a shake-up," Jaitley said at the Bloomberg India Economic Forum here.

"I think the demonetisation debate in India actually is being held at two different levels. The first level was 'there's an inconvenience caused, there are queues which have come up'.

"(The second argument being) 'Oh the money has come back into the system'. But that was the whole idea. The idea is not to confiscate money," the finance minister said.

"The idea is to make sure that this anonymous cash operating in the system itself becomes a part of the system," he said.

"There were three principal objectives besides the big picture that we wanted to shake and break the Indian normal.

We wanted to create a new Indian normal," he said.

While announcing the decision to ban Rs 500 and Rs 1,000 notes on November 8 last year, Prime Minister Narendra Modi had said the move was aimed at reducing black money, checking counterfeiting and curbing extremism. Referring to the "principal objectives", Jaitley on Friday said note ban helped reduce the reliance on cash, particularly high denomination currency.

"In the first round itself we have managed to squeeze a significant part of it (currency)," Jaitley said. It also helped increase the tax base as the anonymity associated with the cash was no longer available, he said.

"A lot of people had to (come into tax net) because once you put money into the banking system, the anonymity of cash was lost. Cash got identified with its owner," he said.

On digitisation, the third "principal objective", Jaitley said digital transactions have "multiplied" and digitisation has now become "centre stage agenda of economic governance in India".

New Delhi: The Congress on Friday alleged that the economy is in bad shape under the Modi government and questioned how it will get the Rs 50,000 crore "viagra boost" it has planned for the economy.

Senior Congress leader Kapil Sibal accused the Modi government of "playing with the life of the common man" with its handling of the economy. Citing the high fuel prices, he alleged that the poor were being taxed to fill the coffers of the rich.

"They (the BJP) have no experience of running the country. They can make governments fall, but not make the country. They can break the nation but not unite it," he told reporters.

Referring to the state of economy and the stimulus the government is planning to provide, the former Union Minister said, "This government now realises that they need a boost of 'viagra' to do something about the economy."

He said the government now wants to inject Rs 40,000- 50,000 crores into the economy, because they know "no nation can survive like this".

"Which sector of the economy is doing well in the country except the digital sector," he asked.

Sibal also asked the government to clarify where would it get the Rs 40,000 to 50,000 crore to be infused into the economy.

He claimed there is a shortfall of Rs 65,000 crore because "their privatisation has failed and their spectrum sale is not getting through". Sibal also alleged that while the BJP talks of ease of doing business, the result has been that people have ceased to do business.