Currency demonetisation could lower inflation in the near future: Arvind Panagariya

He said demonetisation would move the entire Indian economy towards white which is a very good step

NITI Aayog vice chairman Arvind Panagariya said on Friday that the government's recent move to demonetise Rs 500 and Rs 1000 rupee notes could lead to moderation in inflation unless there is tangible action from the Reserve Bank of India (RBI).

Addressing the Economic Editors Conference, Panagariya said demonetisation would move the entire Indian economy towards white which is a very good step indeed and also lead to surge in bank savings and shrinking of money in circulation (MI), money supply as the excess cash in the system would be wiped off.

“All these makes me believe that their could be some moderation in inflation in the short-term unless RBI steps in,” Panagariya said.

On the fate of the 12th five-year plan which ends this financial year, Panagariya said that 2016-17 would mark the end of the five-year plan process and instead would be replaced with a 15-year vision document which is under-preparation.

Earlier, addressing the conference, information and broadcasting minister M Venkaiah Naidu said that from this year onwards the Centre has decided that all television channels can get annual uplinking license automatically renewed by just paying the fee 60 days in advance.

Naidu, who is also prominent member of the Narendra Modi government said that as per his information most television channels have been positive about the Centre’s recent move to demonetise Rs 500 and Rs 1000 notes, barring few for reasons best known to them.

He also called upon TV channels and newspapers to focus on the positive side of demonetisation move.