With FM Arun Jaitley highlighting the demonetisation effect on the Indian economy and his expectations of a windfall from it in his Budget speech today, he moved ahead and made some major announcements to ensure that the benefits are leveraged as much as possible. Demonetisation drive was announced by the PM Narendra Modi led NDA government on November 8, 2016 with the intent to curb black money in the system as well as move the country to a less cash dependant state.
The major part of the drive was the ban imposed on the Rs 500 and Rs 1000 notes which formed a large part of the currency notes then in circulation – new Rs 2000 currency notes as well as Rs 500 note was introduced. Another big goal of the move was to ensure that the country takes to digital payments with a new gusto. With mobile phones penetrating to the very core of the population even at the bottom levels, FM Jaitley sought power up the cashless system even further.
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FM Jaitley today announced that he was giving exemptions to this sector. He said, “Duty exempted on various point of sale (POS) machines and iris readers to encourage digital payments.” he went even further and added, “Payment regulatory board to be set up in RBI to regulate electronic payments, replacing Board for Regulation and Supervision in Payments and Settlements System.”
FM Jaitley said, while delivering the Union Budget 2017-18 today, that demonetisation as “bold and decisive” measure that will have a multiplier effect on the economy and create bigger, cleaner and real GDP. He also said that adding that it has only a transient impact on economy and the long term benefit include higher GDP growth and tax revenue. Jaitley said the government has taken a series of measures to eliminate black money and curb corruption and demonetisation was a step in that direction.