Finance minister Arun Jaitley on Thursday said the 52-day demonetisation drive kicked off on November 8 will significantly benefit the country’s economic growth and fiscal consolidation in the long run.
India’s macro-economic indicators continued to be strong even as the world economy was going through a fragile state, Jaitley said in his opening remarks at the 16th meeting of the Financial Stability and Development Council (FSDC). The country’s economic growth was on track, he added.
The NDA government has come under severe criticism from Opposition parties for its demonetisation exercise, which has sucked out 86% of the currency in circulation, leading to an acute cash crunch.
“World economy is quite fragile, yet India is much better placed today due to the improvement in its macro-economic fundamentals,” Jaitley said.
Key issues relating to economic challenges, including the increase in non-performing assets (NPAs) in banks, were also discussed. NPAs are loans that do not yield returns.
“The council also reviewed the present status of NPAs in banks and measures taken by the government and the RBI for dealing with stressed assets, and discussed about further actions to be taken in this regard,” the finance ministry said in a statement.
Issues relating to cyber security and digital innovations, too, were discussed in the meeting.
RBI governor Urjit R Patel, finance secretary Ashok Lavasa, economic affairs secretary Shaktikanta Das, revenue secretary Hasmukh Adhia and secretary department of financial services Anjuly Chib Duggal, among others, were also present.
While several think tanks have lowered India’s growth projections for the current fiscal following demonetisation, Jaitley said that the move will push growth and expand tax base in the long run.