Commending India's demonetisation and the Aadhaar programme, Mastercard president and CEO Ajay Banga said such measures were the right thing to do to ensure financial inclusion and widen the tax net but these could have been implemented in a better manner.
Banga stressed that he thinks of inclusion as democratising productivity. Among ways to increase and democratise productivity is bringing things into the formula economy and the ambitious measures of demonetisation and the Goods and Services Tax (GST) are helping doing just that, he said.
Hence demonetisation and GST. People may not like the pain they have to go through but it is the right thing to do. You may think of better ways to do it. Fine I agree that there are always better ways to do things, whether it is GST, demonetisation, bringing people in the formal economy, teaching people skills and chasing down the idea of services, he said yesterday.
The India-born head of the American multinational financial services corporation was addressing the 6th New India Lecture' on the topic The Importance and Impact of a Purpose-driven Business' organised under the aegis of Consul General Ambassador Sandeep Chakravorty at the Indian Consulate here.
The lecture series is organised by the Consulate in partnership with the US-India Strategic Partnership Forum (USISPF).
Addressing an audience of prominent members of the Indian diaspora, Banga said he is a passionate believer in India's future and potential. I am a passionate believer in some of the things that the Indian government is doing, he said. At the same time, he suggested that the government needs to democratise productivity and empower women.
Lauding the ability of financial inclusion to give a person an identity, Banga said, That is why I like the idea of Aadhaar, because it gives people an identity.
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He said he disagrees with some elements on how the unique identity program was done but added that measures such as the GST could also have been implemented in a better manner.
Could GST have been done better? Of course it could have been done better. But at least someone has gone and done it which is better than just talking about it. In my opinion Aadhaar is a great idea, it has given people an identity. Today if you have an Aadhaar card, you exist, the president of the global payments and technology company said.
He added that concerns about privacy, cyber security and keeping it an open methodology need to be addressed.
I congratulate the efforts of the things that are going on in India because instead of sitting around and saying why doesn't somebody else do it, this government is trying to do it. Whatever else we may disagree with, this government is doing certain things, he said.
Banga said currently in India, only four per cent of the people pay taxes but that is changing due to reforms like GST.
He expressed confidence that the GST reform, when its cycle is fully gone through, will lead to more people coming into the tax net. He said it may not happen that half of the country's population will start paying taxes but through GST, he is "100 per cent sure" that the four per cent will become multiplies of four.
He called demonetisation a brilliant idea even as he said that more money came back than was initially thought. That means there was something going on in the system. That's not because demonetisation was a bad idea. It's because the system was bigger than the idea. It was a brilliant idea, it could have been done better but it was a brilliant idea.