In an exclusive interview with Supriya Shrinate of ET Now , Piyush Goyal, Power Minister, says if all of us start paying our taxes honestly, we can actually look at lower tax rates, GST rates. Edited excerpts:We have been in opposition for so many years. So, as an opposition leader I he was doing his job. He is a noted economist but see the kind of economy he left behind for us. We respect him as an individual but I do not think he ever got an opportunity to save this country from the kind of distress that we inherited. In fact, presiding over an economy where corruption was the norm, where inefficiency and inability to take decisions was evident in almost every step of the way, I think it may not be easy for him to accept that here we have a prime minister who is willing to take very, very decisive steps in the fight against corruption, in the fight against black money particularly in the fight against terrorism and drug financing .Today with the entire country rallying behind the Prime Minister, different grounds surveys, different feedback that we have been receiving very clearly suggest that despite this inconvenience -- a nation of 125 crore people, 200,000 ATMs, 100,000 bank branches, 155,000 post offices where money has to be moved in volumes never before seen in the history in the world --. the people support it. People are smarter than my colleagues in the house. The people understand that this colossal task needs some time, need support of the people and they say that for the larger of objective of fighting terrorism, (today is 26/11), it is the day where we remember all those people who sacrificed their lives.Any additional preparation would have been at the cost of compromising secrecy and that was of paramount importance. I do not think more than five people were even in the loop. RBI was leading on the front, the RBI board took the final decision on the timing and what needs to be done and to my mind, it was very critical for the success of this entire action that it be kept within the close confines of a small group.To the extent that one can prepare for such a massive action, I think good preparation was done and we are now taking care to enumerate the difficulties that the people are facing. All of us and government are working as a team, are supporting this colossal action and we are very confident that with the blessings of our people of India and with the noble objective at which Prime Minister Modi has embarked on this mission, they will be successful in the task.Certainly there were some difficulties. We do not deny that but we were not at all callous. We were very contentious in our job and monitoring the situation across the country round the clock. There were long queues to begin with, there was uncertainty and in that uncertainty there was a natural tendency to rush to the banks. I myself did not rush, I first wanted to go on the first day but I personally did not go because I realise I can manage with my debit cards, credit cards and that same amount which I would have withdrawn would serve somebody else better.Now in this situation also, there are people who tried to use this system and we are all aware how people would line up repeatedly again and again. Now clearly we did not want to put indelible ink mark. We never started with that but our hands was forced on that. Now one can say that is a reaction but I think that is a smart reaction to stop a misuse and once this has put in that action in place the queues disappeared.Now in any part of the country the queues are not more than 20-30 people at a point of time, if at all anywhere. Over a 100,000 ATMs have been calibrated in the short span of a week or 10 days and money is being moved to the rural areas giving additional limits to the farmers so that they do not miss out on the crop sowing they get their seeds, they get their fertilisers ensuring very soon now I think the Rs 500 notes will be out in market in a good measure. So in every respect this government and by the way many of these things were to a plan it is not as if everything has been decided now. There were many things that were decided that at this stage we will do this, at this stage we will do this and you will continue to hear many moreHas not this government demonstrated by action what has never been done before?Very clearly in 2011, the Supreme Court said form an SIT, it was not done by the same gentleman that erudite economist as the leader of this country could not set up an SIT in three years but Prime Minister Modi did in his first cabinet meeting.Well there are certain complication in that which are beyond the realm of our control.So many things. We cracked down on black money, we gave an opportunity for people to come clean, we opened negotiations and I have already renegotiated with Mauritius and Cyprus. We are working with Singapore to plug the round tripping of money that was happening. We have expanded the engagement with countries for real time data exchange and about a 1.25 lakh crore of black money has been unearthed over the last two years. Now this particular step was important because large amounts of money were reportedly not coming back into the economy.RBI has a mechanism by which serial numbers of notes which come into treasury chest around the country or move through the chest is reported and monitored. There were a number of series of notes which are missing in that. So obviously that was hoarded or that was just not there in circulation.Similarly the fake currency some people try to allege in the parliament that the fake currency reported in previous answers to parliament was some 0.2 per cent. We can only report in a parliamentary answer where we have caught that fake currency. We know for a fact that there must be much more which we are not even aware of. How do we kill that fake currency? The Prime Minister has said that he will come out with more details but we are all aware that the terrorist and all the Naxals and Maoists are suddenly out of business because they do not have enough currency.Our heart goes out to any family who had an unfortunate incident. We are very concerned and we I think on behalf of the government I can only express my condolences and clearly we will be in dialogue with the states to assess what happened, what was the cause, how it happened, how it could have been done better. We will be talking to the particular banks or branches where some of these news came from. I have not heard of any starvation deaths if you have any information please do pass it on to me we will look at that also very seriously. But may I venture to suggest that we really thought that when we are fighting against such a massive amounts of black money, corruption, terror financing, drug cartels using fake currency, the whole nation will rally behind us. Today I got a message from a Colonel who is right there in the battlefield, he has sent me a message sir please stand firm on this decision, do not roll it back. I have gone around the whole of Haryana for the last 10 days. I went to rural areas, urban areas certainly there are some difficulties, some hardships but everywhere I went people said we are happy that Prime Minister Modi has taken such a decisive action.After all I will take a analogy of power trend when five people steal power, the rest of the 95 have to pay higher bills to pay for it. If all of us start paying our taxes honestly, we can actually look at lower tax rates, GST rates.Well I wish former Prime Minister Mr Manmohan Singh would educate us a little more by how he came to that calculation. Another esteemed colleague, of course, gave his own economic theory and made a calculation but I will not join issue on that.First of all, I thought all these years India was always told that it is not a consumption based economy. It is the first time I am hearing on an economic channel that India is an economy…It is the first time I am hearing that India has been a consumption-led economic growth. In fact, that was the western model of America and Europe . I do not think…No. We are clearly encouraging investments in this country. Every time growth took a backseat, it was when investments fell. After all, consumption at a certain level has always been there. It is always the investment which has picked up growth.In the short term, obviously we have acknowledged it. So openly that this quarter is bound to face a small hit because of this major action. But for the long term gain that the Indian economy will have, lower interest rates, better tax compliance, after all GST can never be successful with the large pervasive influence of cash on the economy and therefore illegal transactions. Many people in parliament from the opposition benches have tried to suggest that we should accept that India will continue and will always be a economy which will largely be driven by cash and black money. This government is not willing to accept that I think we owe to the people of India to try and clean the system.Well largely the basic consumption items will not take a hit, agriculture sowing is taking off and I do not see any hit on agriculture. The last crop was the highest kharif crop in the history of India in terms of output. In terms of industrial output, in terms of power you saw the first half showing a 6.5% growth in coal based generation in almost every sector we have been seeing an upswing.Now end of the day I think as an economic person you will appreciate that if more and more of the underground economy comes into the books of people and everybody gets a chance to compete fair and square in an honest environment the GDP is going to benefit from the illegal transactions being reported.Even in the near term it is an upside. If you look at the amount of black money in the system, when that comes into banking channel if at all and if it does not come in and it gets extinguished it gets into the RBI’s books. In every respect you have an opportunity to bring money into investments cycle. Consumption which is today under-reported because of use of black money will start getting more honestly reported. People will be scared to indulge in corruption or in black transactions, illegal transactions like in the past because they know there is a government which means business.The percentage of cash in the total basket of large currency notes 500 and 1000 notes till 2007 were about 68% of the total money in circulation and that has moved up to 86%. What does that reflect and a lot of it is not coming into the system at all.Nobody said cash is bad, we respect cash. Hum to laxmi puja karne wale log hain (We worship Laxmi, the goddess of wealth). So we are very conscious about that. Having said that, you realise the money velocity that we can get as more and more transactions come into the formal economy? Money lying in peoples homes or money hoarded by these black marketers is not helping the money velocity or moving the economy whereas money in the banks moves several times over and helps the economy. In fact, all the so called economists who have spoken so far from the opposition benches on television, who have written articles, have not been very favourably inclined towards this have not yet answered how an additional few lakh crore coming into the economy can ever be detrimental to the economy? It can only add to the economic cycle and economic growth.Well if there was an erosion of faith people would not be standing in lines peacefully. Rajwardhan Rathore, the I&B Minister was in Uttar Pradesh in the parivartan yatra, said there were 30, 40 queues in some of the banks but as the yatra passed by they also joined shouting slogans in support of BJP and praising Prime Minister Modi.Well radical rate cut is a decision that the esteem governor of the Reserve Bank of India makes…Rate cut should be is a function of Monetary Policy Committee decision and they will obviously see the falling inflation numbers that have come out and are expected to come out. Clearly one of the big advantages of this is you would not have an ability to hoard and therefore prices will be kept on check.Once the inflation impact is reduced, then obviously you will see lower interest rates which will help affordable housing Well the State Bank Chairperson announced yesterday a radical rate cut which she said probably a percent or percent and a half has been cut down on bulk deposit rates. Now that is a clear signal of the things to come, we clearly have to, they will have to deploy that money and they will have to deploy that lower rates. So I think now the time has come that possibly you may see rate cuts happening going even beyond what the RBI decide. So the sheer compulsion of the market and the need to lend the large investible surpluses that the banks will have. We need to serve people with affordable interest rates so that people can own their house, they can start a small business, they can do a self employment venture for supporting all of that. There will be a natural competition amongst banks to go down zero.Well, I do not decide monetary policy.One has to keep in mind the reality of what is happening on the ground in terms of investible resources that banks need to invest in terms of inflation numbers and in terms of the outlook. India is that one bright spot in the world where people are yelling for fastest growth which can be taken down to the grass roots where one can see a good monsoon is translated into record food grain production. I am quite sure all of this will be considered by the committee.The honourable finance minister has already talked about lower rate in the past, his ability to translate that lower rates into reality will certainly get a leg up if everybody starts paying their taxes more honestly and we can stop all this round tripping. We have already been able to plug that. If we are able to get to a state where everybody starts paying taxes honestly, it will certainly give elbow room to us to look at lower rates.I have rarely seen the equity market in the last decade react on any domestic factor. I think there has been a more of a reaction to what is happening globally. Well to all the people whom I talk to right from day one and if you remember the first day was a Donald Trump result day. Despite that, the stock market was really gung-ho on this whole move because they are smart, they realised that more of this money comes into the market lower interest rates, faster growth, more ability to invest, a big push through affordable housing, more and more public spending for welfare of the poor, for better health facilities for the poor, possibly better education facilities a leg up for higher quality educational institutions and higher levels of education all of this is good for the economy.Each individual has his own style, this move has been welcomed even by the previous governor, it has been welcomed by other governors. Every governor had his own style, we have had governors in the past who very rarely spoke and we have had governors who spoke regularly.Well I have studied the Federal Governors of Federal Bank all across the world and most governors are very reticent, they speak very little.Well I thought having seen the announcement by the former RBI Governor and since this move has been a food for quite some time and since the current governor was the Deputy Governor at that point of time also I am sure there must have been a complete agreement without with such a major decision the RBI board could not have taken.I hope you mean baniya in the sense of trader and not the cast We respect the trading community in fact if at all…If at all there has been one party which has stood up for their legitimate rights this is the Bhartiya Jan Sangh and after that the Bhartiya Janta Party. We believe that they play an important role in the national economy, we believe that they are a great interface between the consumer and the producer.I will give you an analogy. Mumbai at one point of time had a fairly decent real estate industry and then we had one or two big real estate players started gaming the system. Well one or two started misusing possible loop holes in the law, the others got priced out and gradually realised that this illegal transactions set of people were gaming at their expense and gradually we saw more and more real estate players cloning the illegalities and at one point of time Mumbai had a situation where everybody had to cheat to survive in the market.We had one Municipal Commissioner. He was badly criticised and everybody was up in arms against his policies but he just cleaned up the system. He set a policy guideline and made everybody stick to this. There will be no misuse of FSI guidelines whoever wants additional will have to pay a particular premium formula based and it cleaned up the system.I have not found that kind of an upset mentality anywhere, I had an interaction with all my leaders of Delhi today in the evening and very clearly Delhi we have a large support base amongst traders, they all have questions.They all have questions and I am glad that they have questions which shows how vibrant our Indian economy and its trader community is and I like their enthusiasm to learn what is the changing scenario going to look like. Once they get the feeling that they are all going to have a level playing field I think everybody will be benefited from this move.