Finance Minister Arun Jaitley today said that the negative effects of demonetisation would not spill over to next year. The surplus cash available to banks would increase liquidity and benefit all sections of society, he said.
Jaitley praised demonetisation as an epoch making decision of the government. He quoted IMF projections to press his point that the effect of demonetisation would not spill over next. He said the government would continue to work for the benefit of the poor in the country.
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The shock demonetisation will shave off a good 0.5 percentage point from GDP growth this fiscal, pulling it down to 6.5 per cent, Economic Survey said today while predicting “return to normal” 6.75-7.5 per cent in the next financial year and calling for bold tax cuts.
Indian economy had grown at a revised rate of 7.9 per cent in 2015-16 and was projected to grow by 7.1 per cent in the current fiscal by the Central Statistical Organisation, which did not account for disruption caused by demonetisation.
“Over the medium run, the implementation of the GST, follow-up to demonetisation, and enacting other structural
reforms should take the economy towards its potential real GDP growth of 8 per cent to 10 per cent,” said the Survey tabled in Parliament by Finance Minister Arun Jaitley.