AMN / NEW DELHI
UNION Finance Minister Arun Jaitley today said that the fallout of demonetisation was on predicted lines and the economy will benefit in medium and long term.
Addressing the inaugural session of India Summit here today, Mr Jaitley said the fact that money got deposited in banks did not mean that all of it is legitimate money.
The Finance Minister said demonetisation prediction was that more and more people would come under the tax net and it will also help in increased direct tax in coming months.
He said demonitisation was also widely politically accepted and it helped in bringing transparency in the system.
Mr Jaitley said third quarter when it was implemented there was no impact on GDP, it was fourth quarter which was slightly affected.
On the Goods and Services Tax (GST), Mr Jaitley said it is too early to estimate the gains from GST, but the gains would be significant. He said GST will have a multiplier effect on direct tax a little later. He said manufacturing may have suffered as people were clearing their stock due to GST.
Mr Jaitley said one GST rate for such highly disparate population would not be equitable. He said goverment expect two standard GST rate converging into one in the future. Finance Minister said if compliance high, council may take a decision on convergence of gst rates.
On Index of Industrial Production IIP, Mr Jaitley said IIP has not been very encouraging in the past few months. He expresses hope prevention of corruption act will be ratified by Parliament soon.
Mr Jaitley goverment have now started opening defence sector only for private players. He said this will help boost defence manufacturing in India.