Hoarded black money to be converted into cheaper loans: Jaitley

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The future agenda of the government, as stated by Prime Minister Narendra Modi in his speech on New Year’s eve, is to channel the wealth that was previously being hoarded as black money into cheaper capital for affordable housing, women’s health, the agriculture sector, and medium and small enterprises, Finance Minister Arun Jaitley said on Sunday.

Mr. Jaitley added the remonetisation process is progressing “extremely well” and would be completed very soon.

“I see 2017 as a year whose agenda has been set last night by the Prime Minister,” Mr. Jaitley said. “Cheaper loans for affordable housing, women’s health, for the agricultural sector, for the MSMEs, and therefore cheaper capital and the transfer of this wealth which was being hoarded as black money now as cheaper capital in these areas is the future agenda of the government. The Finance Ministry will do its best to implement every word of what the PM has announced yesterday.”

While saying that 2016 saw several major economic reforms like the passage of the insolvency law, the creation of the Monetary Policy Committee, and the passage of the constitutional amendment bill on the Goods and Services Tax, Mr. Jaitley added that he was confident that 2017 would see GST being implemented.

“Last year we saw a large number of major economic steps taken by the government. We had the Monetary Policy Committee, we are now keeping inflation under control, there is a specified target and consequently we have also seen the interest rates coming down which hopefully should come down further,” he said.

“And for the implementation of GST this year, we are moving at a fairly good pace. And, I am sure 2017 will see this historic indirect tax reform in India, which will be the biggest ever tax reform since independence.”

On demonetisation, Mr. Jaitley said that it process has been completed in “a very successful and peaceful manner”, with the whole country supporting it overwhelmingly.

“The remonetisation process has progressed extremely well and I am sure in the days to come it will be very soon completed,” he said. “The benefits of this are already flowing into the system. What was the shadow economy and black money has now lost its anonymity and come into the banking system. This will lead to a changed spending habit of the people.”

“And obviously it will mean the more lending capacity of the banks and the cost of capital will come down,” Mr. Jaitley added. “There will be more taxation receipts of the government, so the government’s ability to spend and support the spending will also increase.”