Economic Survey 2016-17: Chief Economic Adviser Arvind Subramanian while speaking at the Economic Survey 2016-17 said that there has been a regime shift in terms of macroeconomic stability since demonetisation.
He revealed that about 5.4 lakh new tax payers have been added since Prime Minister Narendra Modi declared Rs 500 and Rs 1000 notes invalid on November 8, 2016. “5.4 lakh new tax payers added in post-demonetisation period, a big number,” he was quoted as saying by ANI.
Talking more about the impact of demonetisation on the Indian economy, Subramanian said the long term effect is that there has been a 20% reduction in cash in the economy.
He added that so far the government has overachieved its targets on inflation and it will soon be within target. “Substantially overachieved on checking inflation; by the end of March, inflation will be well within the target. Long term effect of demonetisation has been a 20% reduction in cash in economy”, the CEA added.
Talking about the boom to mobile banking, Subramanian said both level and pace of digital payments have been different since demonetisation.
While speaking about the historic Goods and Service Tax which was implemented last month, Subramanian said it is an astonishing feat of administration, politics and technology.
He said farm loans are going to have a deflationary, not inflationary effect if states’ borrowing limit is not raised. The Chief Economic Adviser further added that the balance of risks to growth has shifted to the downside.
His comments came in the backdrop of protests being held by farmers across the country. He said a structural decline in inflation rates and outlook has created scope for lower interest rates and monetary policy.
Source: Financial Express
