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Finance Minister Arun Jaitley admitted that there is a shortage of currency notes after the government’s demonetisation decision on November 8, but said it is being addressed.
“The RBI every day releases a certain amount of currency. Some people feel there is a shortage. There is obviously a shortage and therefore there is a parallel movement on to make up that shortage by going digital,” Jaitley said at the Petrotech 2016.
“A decision of this kind can lead to pain during transition, which is regrettable. But this was also factored in (when taking the decision),” he said. “In the whole process you find that today the phase we are passing through, we are at a major cusp of change.”
Defending the government’s move despite severe criticism from all quarters, including the media, Jaitley said, “What we would end up achieving is to lay down this new normal.”
Talking about the long-term advantages of this new normal, he said it will mean more money in the banking system, more capacity of the banks to support the economy, to support growth, availability of low-cost funds with the banks in their current and savings accounts, more transactions coming in the banking system, which means more transactions coming in the taxation system.
The Finance Minister went on to say that at the pace at which digitisation is taking place post the November 8 decision, it will become a comfortable habit.
The government has been doing a regular review of the whole process and ensuring that banks are making all efforts to facilitate genuine transactions. In recent years, advancements in banking technology, progress in mobile banking and innovative technologies to facilitate digital payments have enabled a large number of small denomination transactions to be handled smoothly in the electronic mode.
In its endeavour to move towards the electronic payments, the Central Government Ministries/Departments have been crediting the salary and other payments for the majority of its employees electronically, direct into the designated bank accounts of the employees.
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