All scrapped notes won't be remonetised: Jaitley

New Delhi: Union finance minister Arun Jaitley indicated on Saturday that not all of the Rs 15.44 lakh crores worth of currency junked last month would be remonetised through new notes, saying digital currency would fill the gap. He also said that the proposed goods and services tax (GST) could be implemented anytime between April 1 and September 16, 2017.

Conscious efforts would have to be made, he said, to supplement the reduced cash with digital currency post demonetisation. After its November 8 currency replacement move to fight black money and fake currency, the government is heavily promoting digital transactions to  battle a crippling cash crunch.  

“Even though a reduced cash currency could remain, our conscious effort... (is) to supplement the rest with digital currency,” he said at a session with industry captains at Ficci. The scramble for cash has hit India’s largely cash-based economy, also causing a string of deaths, prompting an unrelenting Opposition attack on the government and disrupting an almost entire Parliament session.

Mr Jaitley however said that once the process of remonetisation was over and turf issues regarding sharing of revenue from GST were resolved, India would see a new normal, not acceptable for the last 70 years. He said that the downside of a cash-heavy economy were poor tax revenue and use of cash for illegal purposes.

While queues have stayed outside low-on-cash banks and ATMs more than five weeks after the Centre started replacement of high-value bills, Mr Jaitley said that there has been a significant increase in the usage of digital payments during the period as most people support the switch.

He said that this transformation would have to be taken to its logical conclusion. “To take bold decisions, one needs to have clarity of direction, courage and stamina to sustain the reforms process. The government is determined for this,” he said.

The Opposition has sharpened its attack on the government, saying the drive to promote digital transactions was a move to cover up “no real black money windfall” for the economy.

A constitutional amendment enabled the long-awaited GST that awaits its rollout to turn India’s economy into a single market, broadening the tax base and making life simpler for businesses that now pay a host of central and state levies.

The minister said that 10 major decisions had already been taken by the GST Council, all of these by consensus. Legislations by the Centre and state are being drafted and there should not be any major difficulty in these being approved, he said. There are one or two issues with regard to cross-empowerment of the Centre and states, which will be amicably solved, he said.

He said that the current mode of taxation would continue till September 16 and the range of timing for GST’s rollout would be between April 1 and September 16. The earlier GST was introduced, the better it was, he said and added since it was a transactional tax, it could be introduced at any time of the year unlike the income tax.