Increase in volume of digital transactions, widening of tax base and squeezed circulation of high denomination currency were the real measures of success of demonetisation, Finance Minister Arun Jaitley said on Monday.
The success of the November 2016 note ban came under attack after the Reserve Bank of India revealed that almost 99 per cent of the banned currency had returned to the banks.
"Some circles have lack of understanding and measure success of demonetisation with only how much money reached banks," Jaitley said here at the launch of Google's new digital payment app—Tez.
He stated that digitisation was given a nudge as many adopted to it out of compulsion rather than convenience, which eventually developed a habit. "After the November 8 demonetisation drive, many went in for digitisation out of compulsion rather than convenience, which eventually created a habit. We attained a peak growth figure, which, although has seen a marginal slip, will pick up again. In addition to UPI and other measures, there will be a major advancement in the shift to a cashless economy, and will reflect upon the spending habit of people."
While the 'notebandi' came as a shock to many, Jaitley said the debate has seen a drastic involvement over the last few months. Most importantly, there has been a squeeze in the volume of high currency denominations, and is projected to continue in the natural course of the economy.
"Earlier, the need for finding alternatives to a high cash economy was not at the centre of our economic agenda, and was not taken very seriously and discussed in Parliament. We got into the habit of living in a high cash economy and payed the costs involved," said Jaitley.
The Google team, Jaitley stated, saw immense potential in tapping the digital payments market, and was very keen in helping finding alternatives to cash payment. "Technology evolution has made the app the simplest form of monetary transaction. With the need to find alternative solutions to cash transactions, the Google team was very keen on exploring this and saw immense potential," he said.
