Tax collection up, more new notes of Rs 500 soon: Arun Jaitley on note ban

NEW DELHI: Nearly 50 days after the implementation of demonetisation , finance minister Arun Jaitley said on Thursday that the critical phase for the economy is now over and the situation will only improve further."The critical part of remonetisation is now behind us and it will be much better, going forward," Jaitley told reporters at a media briefing.Jaitley said that the November 8 decision has greatly benefitted the economy, with a double-digit increase in tax collection figures."Notwithstanding what critics predicted, there has been significant increase in tax collection in all segments. Till December 19, direct tax mop-up rose 14.4%, indirect tax grew 26.2%, central excise is up 43.3%," Jaitley said.On the issue of cash crunch, the BJP leader informed that remonetisation has advanced substantially and the RBI has a large amount of currency available with it."A large part of the demonetised currency has been replaced and more new notes of Rs 500 are being released for circulation," he added.Asked whether the government would take a conscious decision to reduce the quantity of money in circulation in the remonetising process, Jaitley said that is a decision RBI will take guided by market requirements."One of the intentions as far as government of India is concerned is that the paper currency should shrink and a large part of businesses should be in the alternative digital or cheque mode. Considering the very large increase in digital users that have taken place we seem to be moving in the right direction," he said.Replying to questions on when customers can see easing of curbs on cash withdrawals, Jaitley said, "That is a decision the central bank will take in consultation with everyone."The finance minister underscored that contrary to apprehensions, the impact on GDP was not as bad as feared and in fact, various sectors such as investment in mutual funds and life insurance, fuel consumption, and tourism witnessed growth post demonetisation However, he refused to hazard a guess on the GDP growth for the year or the possible impact on tax proposals in the Union Budget for 2017-18 on account of increased revenue collections, PTI reported.Jaitley thanked people for supporting demonetisation and said that not a single incident of unrest has been reported over junked notes.